Annual Report 2015 - Triodos Bank · Annual Accounts 2015 of Triodos Bank Report by the Foundation...
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Annual Report 2015 T¬B
Transcript of Annual Report 2015 - Triodos Bank · Annual Accounts 2015 of Triodos Bank Report by the Foundation...
Annual Report 2015
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Triodos Bank produces a printed, audited version of the Annual Report. We do this because some of our stakeholders want to read the report in this format and because we are legally required to provide the Annual Report as a discrete, single document.
However, we have chosen to put more energy into producing the Annual Report online. The online Annual Report includes content that is not in this document; from films highlighting the extraordinary work of the sustainable enterprises we finance and an interview with our CEO, to an extended chapter about Triodos Bank’s impact.
We believe the online Annual Report provides a more complete picture of our performance and our aspirations for the future, and many more people choose to view it than read the report in print. It has also allowed us to reduce the number of printed copies of the report we produce each year.
However you choose to read or view the Annual Report, we hope it provides you with a rich picture of Triodos Bank’s values-based mission, strategy and impact in the wider world. We appreciate your feedback, so please contact us via the ‘tell us what you think’ button on the homepage of the website.
www.annual-report-triodos.com
Triodos Bank is a co-founder of the Global Alliance for Banking on Values, a network of leading sustainable banks – visit www.gabv.org
Important data for Triodos Bank’s shareholders and depository receipt holders.
Annual general meeting of shareholders 20 May 2016Ex-dividend date 24 May 2016Dividend payment date 27 May 2016
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Key Figures
Triodos Bank Group Structure 2015
Sustainable Banking
Triodos Bank Business Model: Creating Value
Executive Board Report
Corporate Governance
Supervisory Board Report
Annual Accounts 2015 of Triodos Bank
Report by the Foundation for the Administration of Triodos Bank Shares (SAAT)
Appendix – Co-worker and Environmental Statistics
About this Report
Addresses
Production
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Annual Report 2015Triodos Bank NV Page
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Key Figures
Amounts in millions of EUR 2015 2014 2013 2012 2011
Financial
Equity 781 704 654 565 451
Number of depository receipt holders 35,735 32,591 31,304 26,876 21,638
Funds entrusted 7,283 6,289 5,650 4,594 3,731
Number of accounts 707,057 628,321 556,146 454,927 363,086
Loans 5,216 4,266 3,545 3,285 2,838
Number 44,418 36,320 29,620 24,082 21,900
Balance sheet total 8,211 7,152 6,447 5,291 4,291
Funds under management* 4,087 3,480 3,199 2,754 2,495
Total assets under management 12,298 10,632 9,646 8,045 6,786
Total income 211.6 189.6 163.7 151.6 128.7
Operating expenses –150.2 –138.4 –112.6 –100.1 –89.9
Impairments loan portfolio –7.6 –11.1 –17.1 –20.9 –15.8
Value adjustments to participating interests 0.2 0.2 0.2 0.2 –0.1
Operating result before taxation 54.0 40.3 34.2 30.8 22.9
Taxation on operating result –13.3 –10.2 –8.5 –8.2 –5.6
Net profit 40.7 30.1 25.7 22.6 17.3
(Common) equity tier 1 ratio** 19.0% 19.0% 17.8% 15.9% 14.0%
Total Capital ratio** 19.0% 19.0% 17.8% 16.0% 14.4%
Leverage ratio*** 8.4% 8.8% 8.7% 9.0% 8.4%
Operating expenses/total income 71% 73% 69% 66% 70%
Return on equity in % 5.5% 4.4% 4.3% 4.5% 4.3%
Return on assets in % 0.5% 0.4% 0.4% 0.4% 0.4%
Per share (in EUR)
Net asset value at year end 81 78 77 75 74
Net profit**** 4.40 3.41 3.23 3.37 3.18
Dividend 1.95 1.95 1.95 1.95 1.95
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2015 2014 2013 2012 2011
Social
Number of co-workers at year end***** 1,121 1,017 911 788 720
Co-worker turnover 14% 10% 7% 10% 9%
Women as percentage ofmanagement team 38% 40% 40% 42% 37%
Training costs per co-worker in EUR 1,692 1,856 2,055 1,731 2,020
Ratio of the highest full-time salary to themedian full-time salary****** 5.7 5.6
Environment
Emission of CO2 (1,000 kg) 3,041 3,084 2,906 2,986 2,885
CO2 compensation 100% 100% 100% 100% 100%
* Including funds under management with affiliated parties that have not been included in the consolidation.** The calculation of the (common) equity tier 1 ratio and the total capital ratio for 2015 and 2014 is based on the
reporting requirement under the Capital Requirement Directive (CRD) and Capital Requirement Regulation (CRR)known as at reporting date. The calculation of the comparative figures is based on the Basel III rules.
*** The calculation of the leverage ratio for 2015 and 2014 is based on the reporting requirement under the CapitalRequirement Directive (CRD) and Capital Requirement Regulation (CRR) known as at reporting date. Thecalculation of the comparative figures is based on the Basel III rules.
**** The figure of net profit per share is calculated on the average number of issued shares in circulation during thefinancial year.
***** Concerns all co-workers employed by Triodos Bank NV, excluding co-workers employed by the joint venture TriodosMeesPierson.
****** As of 2015 instead of the ratio between the lowest and highest salary, we report the ratio of highest full-time salaryto median full-time salary (the median is defined excluding the maximum full-time salary in order to betransparent about the difference between the highest paid co-worker and the rest of the co-worker group), basedon the GRI criteria. This ratio, available as of 2014, is considered best practice and provides a more meaningfulindication of the ratio between salaries.
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Triodos Bank Group Structure 2015
Foundation for the
administration of
Triodos Bank Shares
Triodos Bank
Retail & Business BankingThe Netherlands | Belgium | Germany | Spain | United Kingdom
Retail BankingThrough our European branch network, our goal is to offerour customers a credible set of services including savings,payments, lending and investments.
Business BankingWe lend money only to organisations working to bring aboutpositive and lasting change.
Our lending focuses on three key areas:
• Nature & Environment
• Culture & Welfare
• Social Business
Investment ManagementEurope | Emerging markets
Impact Investingtakes place throughinvestment funds orinvestment institutions bearingthe Triodos name.
The 18 active funds aregrouped in business linesbased on the themes theyinvest in:
• Energe & Climate
• Emerging Markets
• Real Estate
• Arts & Culture
• Sustainable food &Agriculture
• Socially ResponsibleInvestement (SRI)
Private BankingThe Netherlands | Belgium
Private Bankingoffers a broad range offinancial and non-financial services towealthier people,foundations, associationsand religious institutions.
Sustainable assetmanagement is the coreservice and includes bothTriodos Investment fundsand private assetmanagement.
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Sustainable Banking
Triodos Bank finances companies, institutions andprojects that add cultural value and benefit peopleand the environment, with the support of depositorsand investors who want to encourage sociallyresponsible business and a sustainable society.
Triodos Bank’s Mission is• to help create a society that promotes people’squality of life and that has human dignity at its core• to enable individuals, institutions and businesses touse money more consciously in ways that benefitpeople and the environment, and promotesustainable development• to offer customers sustainable financial productsand high quality service.
AmbitionTriodos Bank wants to promote human dignity,environmental conservation and a focus on people’squality of life in general. Key to this is a genuinelyresponsible approach to business, transparency andusing money more consciously. Triodos Bank putssustainable banking into practice. First and foremost,this means offering products and services thatdirectly promote sustainability. Money plays a leadingrole in this because using money consciously meansinvesting in a sustainable economy. This in turn helpsto create a society that enjoys a better quality of life.
Market and Core ActivitiesTriodos Bank aims to achieve its mission as asustainable bank in three ways.
As a relationship bank
Triodos Bank’s service is built on deepening anddeveloping long-term relationships with itscustomers. This singular focus on relationships isshared across the organisation, while how they aredeveloped differs as the organisation benefits fromunity within the diversity of its branches andgeographies. It fosters these relationships throughvarious channels, including offices where customers
meet co-workers face-to-face, by post, over thephone and increasingly via the internet.
Triodos Bank’s aim is to create a broad customer basethat’s closely connected to it – a combination ofprivate and corporate customers who have made aconscious decision to bank with Triodos. Exactly howthis happens also differs in each country; its serviceshave developed in different ways in each of thecountries where it works, depending in part on thestage of development of the branches and offices inquestion.
As a sustainable service provider
Bank customers not only want sustainable productsand services, but also competitive prices and aprofessional service. Triodos Bank believes that thesekey customer values cannot be seen in isolation. So ittries to offer a collective package of banking servicesto promote sustainable development. And it does so,in the context of meaningful, transparentrelationships with its customers.
Triodos Bank’s commitment to meaningfulrelationships as a key strategic objective, leads to thedevelopment of innovative products which directlyreflect the mission and values at the core of its work.Product development takes place in all countries.
As a reference point
Triodos Bank wants to stimulate public debate onissues such as quality of life, corporate socialresponsibility and sustainable banking. It also wantsto use over 30 years’ experience to encourage societyto promote more sustainable development. Theimplications of this public debate extend well beyondthe activities of Triodos Bank itself. Triodos Bank’svision and approach has led to it internationalrecognition. Its participation in the public debate,often through high impact events that it hosts andparticipates in, means people can see what TriodosBank stands for and hear its opinions aboutimportant social trends. Triodos Bank’s identity iscrucial in this respect, strengthening the Triodos Bankbrand and reputation.
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Triodos Bank Business Model: Creating Value
Capital inputs
Social (capital)• Skilled co-workers motivated
by mission• Expertise in social, cultural
and environmental sectors• Supported by specialist training
and development
Inspirational (capital)• Regular reflection sessions• Engaging in two-way dialogue
with stakeholders
Financial (capital)• Finance from like-minded
customers who choose to use their money positively
• Fair, mid-market returns to attract loyal, values-aligned customers
VALUE CREATION VALUE CREATION
The Triodos essence
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• A values-based bank, enabling people to use money consciously to create a healthy society with human dignity at its heart
Our role
• Our mission fully integrated in our strategy
• Only financing sustainable enterprises in the real economy all of which we publish openly
• Meaningful, human relationships with customers
• First bank, offering comprehensive sustainable products and services
• Financial resilience including high capital ratios
• Managing risk, balanced growth (targeted loans to deposits ratio of 65–70%)
• Offering fair financial returns with sustainable impact
• Acting as a reference point for sustainable banking through our own sustainability, innovation and leadership
The changing world
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• Responding to an evolving landscape of societal challenges and innovative enterprises addressing them
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Triodos Bank Business Model: Creating Value
Triodos Bank business model in brief
Our business model and value creation process is illustrated in the diagram on the left.
Our business model transforms capital inputs – such as the skills and entrepreneurship of the people within our organisation and money from customers, via our core products and services, into value outputs – such as making a positive contribution to the development of a healthy society.
To make this financially viable, we offer fair (but not inflated) interest rates to savers and aim for reasonable long-term returns for investors both in our funds and in Triodos Bank itself. We use these deposits to lend to sustainable entrepreneurs working in the real economy, so they can deliver real impact.
In order to lend to sustainable enterprises we aim to use deposits rather than borrow from other banks. And we aim to deliver a healthy balance between loans and deposits so we’re able to mobilise as much of our deposits as possible. We also maintain healthy levels of capital, well above regulatory requirements. This makes us more resilient over the long-term. Triodos Bank develops through cycles of reflection and dialogues between our inner essence as an organisation and our interaction with society’s evolving needs.
Value outputs
People• A positive contribution to the
healthy development of society• Supporting a community of interest
to bring about social change• Enabling values-driven
entrepreneurs to fulfil their potential
• Transparent finance so stakeholders see how money is used
Planet• Finances for sustainable and
inclusive enterprise• Development of a sustainable,
circular economy
Prosperity• Fair Return on Equity
(target of 3-5% in 2016)• Leverage ratio of at least 8%
ensuring resilience• Developing compelling visions
for the future of finance
VALUE CREATION
Executive Board Report
The report in short
The Executive Board chapter provides an overviewof Triodos Bank’s perspective on the wider world itoperates in, its impact and activity in 2015 and itsprospects for the future.
To help make this chapter easier to navigate wehave broken it down into its constituent parts. Inessence the chapter is divided between:• A narrative section: a high level perspective onthe world we’re in and Triodos Bank’s place in it• An analysis of key or ‘material’ issues: thesetopics are defined by our stakeholders andTriodos Bank, and reported on throughout thereport• A summary of our strategic objectives,performance and future goals• Our results: both impact-based and financialand across Triodos Bank’s branches, TriodosInvestment Management and Private Banking• and key risk and compliance information.
We welcome feedback on the annual report.Please send it to [email protected].
Feedback loops for good
We live in a connected world whose links can be botha force for good and for ill. For example, climatechange feedback loops can exacerbate changes in theclimate in a vicious, negative cycle. One of the best-known relates to melting ice. Ice and snow are light-coloured and reflective, so a large proportion of thesunlight that hits it bounces back to space, whichlimits the amount of warming it causes. As the worldgets hotter, ice melts, revealing the darker-colouredland or water below. The result is that more of thesun’s energy is absorbed, leading to more warming,which in turn leads to more ice melting – and so on.
Similarly, the risks associated with a financial systemthat was dedicated to unfettered growth and wealthresulted in a deep-seated crisis. This, in part, led togovernments choosing austerity measures which have
had serious consequences for wider society. Reducedwelfare budgets, job losses and less lending tobusinesses have together made economic recovery aslower and more painful process.
But feedback loops can also deliver positive change.Triodos Bank depositors, for instance, discover moreabout issues such as climate change and socialinequality as they hear more about the projects theirsavings help to finance. This in turn can influencechoices about what they buy as well as what theysave. Exposure to new businesses and ideas can evenaffect decisions about health, education and well-being.
Our lives, and the ‘big issues’ we increasingly face asindividuals and communities, are connected in eco-systems; whether they are in the natural environmentor in business. As a result we believe solutions to ourgreatest challenges have to be joined up, and holistic,too. In effect, we need to create more, and moreimpactful, positive feedback loops. Triodos Bank’sstrategic goals, which we describe in more depth laterin this chapter, reflect this conviction.
The tragedy of the horizon
This perspective is not only ours. In speeches during2015, leading regulators made the link between thefinancial system and a number of other major issuesin 2015 citing the profound long-term effects ofclimate change on poverty, migration, politicalstability and food and water security. One describedthe short term planning that’s linked to shortbusiness and political cycles and the mandate ofcentral banks, as creating a ‘Tragedy of the Horizon’.
Another Central Banker went as far as to state that“we are at a crossroads” and that “sustainabledevelopment is key to securing the well-being andwelfare of this generation and many that will follow”.The need to address these issues is no longer urgent;it has become critical. The challenges predicted byorganisations like the Club of Rome in 1972, whohighlighted the problems of exponential economicand population growth in a world of finite resources,are here today.
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During the year we witnessed a massive movement ofpeople fleeing war in Syria, among other places, toEurope. Research from the Met Office, the UK’snational weather service, showed temperatures arealready up by one degree, halfway to a dangerousthreshold, and the COP21 climate conference in Parisat the end of the year was considered by some to offera ‘make or break’ chance to prevent catastrophicclimate change. Around the same time terroristattacks struck Europe, North Africa and the MiddleEast. These events came on the heels of a financialcrisis which continues to occupy the attention ofregulators, politicians and citizens alike.
Together these crises may feel overwhelming butthere has been a strong positive and holistic responseto them; from the extraordinary dignity of individualsdirectly affected by the terrorist attacks, to shifts inthe thinking of central banks, to major technologicaland practical developments in the renewable energysector and the embracing of refugee communitiesright across Europe. Increasingly, people recognisethat we are systemically connected and dealing withone issue is not sufficient if we’re to improve people’squality of life overall.
How Triodos Bank responds to an uncertain future
Triodos Bank is part of this changing world anddeveloped a 10 year perspective during 2014 to betterequip itself to deliver its sustainable mission. Welearned from others, developed scenarios and sharedthem in last year’s annual report. This, in turn, lead tothe development of four new, key strategic directions,described below, and which will be at the heart of ourbusiness plan over the coming three years.
These hypothetical futures enable Triodos Bank toview the actual future from a broader perspective.They enable us to assess and respond to developingevents, like the ones above, in context and from asystems perspective. This can help avoid short-termresponses to apparently alarming new developments.And they act as inspiration to develop concrete plans,such as ‘broadening our scope’, to help meet thechallenge of society’s converging questions; a coregoal in the coming period.
We recognise, for instance, that the major globalagreement to limit carbon emissions that came out of theCOP 21 climate conference in Paris in 2015 mayencourage investors to avoid resources that may becomestranded assets in fossil fuel industries and seek impact-based assets instead. This in turn should encourageinvestors to see their finances in a broader context, takingaccount of the impact of their finance as well as its likelyreturns and risks. The 10 year perspective helps us to viewthe agreement through a wider lens. For us it is animportant and positive stepping stone provided it can betranslated into a profound shift towards impact-basedfinance that delivers clear benefits for society as well asfinancial returns.
We understand impact finance to be transformationaland define it as directing money so that it benefitspeople and the environment over the long-term. Impactcomes first, and it should also provide fair financial andnon-financial returns. This is crucial to understandinghow Triodos Bank approaches the future and hasdelivered its mission in the past. It also differentiatesTriodos from almost all other banks.
Triodos Bank’s 10 year perspective, including engagingwith stakeholders from a number of companies with aninterest in sustainability, has led directly to the definitionof four key strategic areas that we believe will help us tocontinue to increase Triodos Bank’s sustainable impact inthe future. All four appear early on in the strategic object-ives table that follows this section of the report. Impor-tantly they are all areas which our stakeholders recogniseand value, as our materiality analysis below shows.
• Broaden our scope: We intend to broaden our scope,both by extending our own products and services tobecome a first bank for our customers in all thecountries where we work, and by developing ouractivities beyond standard banking. This work hasalready started. In 2015, for example, we launched aproject in Spain which links customer spendingdecisions with gift money. The Spanish branch hascreated a responsible consumption service.Sustainable businesses that are Triodos Bankcustomers are located on a map so private customerscan find and shop in them. Purchases in some of thesebusinesses automatically generate a donation from the
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business (instead of a conventional introduction fee) tothe Triodos Foundation.• Innovating new ventures and partnerships: We willinnovate more. We created LEAF Lab – a collaborativeinitiative across Triodos Bank’s Dutch business unitsthat’s focused on developing new innovations thatmeet the needs of our stakeholders – during the year.We also launched the Triodos Multi Impact Fund in TheNetherlands. This ‘fund-of-funds’ offers Dutch retailinvestors an opportunity to make their money work inmultiple sectors that are all key in the transition to amore equitable and sustainable world. The Fund bringsa number of separate funds together in one place froma variety of sustainable areas, creating more liquidityso it’s easier to buy and sell shares, and making impactinvesting available to a broader group of ‘ordinary’investors.• Again, our stakeholders tell us they value sustainableinvestments highly; it’s the single most important issuefor them in the materiality analysis below and thebank’s second highest priority. Funds, like the TriodosMulti Impact Fund, help meet this demand. In Spain,Fundación Triodos has launched the first crowdfundingplatform for organic gardens in Spanish schools. Theplatform is integrated into a collaborative website,Huertoseducativos.org, where schools can shareexperiences about the educational benefits of anorganic garden. Projects in two schools were fundedbefore the year end and the initiative has won a prize asone of the 50 best digital ideas in the market from anational economic newspaper.• Becoming more of a learning organisation: During theyear we articulated the ‘essence of Triodos’. This texthas been the basis for discussions about the essencewith co-workers across all our branches to build acloser relationship to the values and Triodos Bank’sthreefold approach; always asking three questions ifwe are approached to finance a project or a business:Is there a thriving, deep rooted idea behind thebusiness, that motivates the people in it? Is there adeveloping community or entrepreneurial spirit thatshares a strong culture? Does the business makeeconomic sense and address a real need? In 2016 wewill also roll out Engage, an online collaboration andlearning tool for all of Triodos Bank, providing a tangibleway to help learn, share and retain knowledge.Learning from our stakeholders is crucial for Triodos
Bank to continue to develop. This includes participatingin social networks to identify the financial needs of thefuture, and the projects and people that will change theeconomy and make it more sustainable and social.• Deepen our relationship approach: We will work withcustomers in particular, leveraging communities andnetworks in our sectors, sharing knowledge andinsights. And we will harness fast-changing technologyto support rather than diminish relationships. In 2015we hosted hundreds of meetings, bringing co-workers,savers and investors together with borrowers incountries across Europe. We also strengthenedexisting partnerships with banks, like those in theGlobal Alliance for Banking on Values (GABV),exchanging knowledge and expertise in a number ofareas from impact reporting to bringing Boardmembers together to discuss shared issues. We alsoestablished and participated in new alliances like theB Corporation, a certification body for companies whowant to benefit society as well as investors. We hosteda special event at Triodos Bank to launch B Corporationin Europe, for example.
Impact, Risk and Return –an Integrated BusinessThese strategic focus areas will help us to build on theachievements of the past, and develop further positive,sustainable impact in the future. We will increasinglyuse impact, risk and return to understand and assessthis progress and performance in a holistic way.
Traditionally banks have focused on risk and return,primarily to avoid negative outcomes, and to enableinvestors to understand the performance of a particularinstitution. Risk and return tend to be seen in a short-term context, particularly when an institution sees itsmain goal as maximising returns to shareholders. It’s aperspective that sees a company through the narrowlens of its financial performance only; and it neglects acompany’s wider relationship with – and impact on –society and the environment.
So Triodos Bank uses impact, risk and return tounderstand its overall development and place in theworld around it. This necessarily means it has a positive,long-term perspective. Because if you are focused on
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delivering sustainable social, environmental andcultural impact as well as risk and return – as TriodosBank is – your horizon is inherently longer-term and hasa positive, holistic outlook.
Impact
Triodos Bank wants to deliver sustainable impact. Whenwe talk about ‘Impact’ we are concerned with what ouractions, in particular financing and facilitatinginvestments, mean concretely to people. Impact meansdelivering positive outcomes, not only on a transactionallevel but also on a social, ecological system level.
Increasingly many banks and businesses talk aboutsustainability and their efforts to make sustainableimpact happen. This approach can be more limited inscope focusing, for instance, on reducing CO2 emissionsor divesting from financing industries that use fossilfuels. These are laudable aims. Indeed Triodos Bankjoined other financial institutions in The Netherlands tosign a Dutch Carbon Pledge during the COP21conference in Paris in a commitment to experiment withannual carbon foot printing, disclosure and targetsetting for investments. But impact goes much further.We want to use finance as a catalyst to make new,sustainable ideas a reality in the real economy.
As well as delivering impact, we also want tounderstand and communicate our impact better.During 2015 this included providing more meaningfulinformation about the qualitative impact of TriodosBank’s finance, auditing the impact data we provideand developing a manual to provide co-workers witheverything they need to know about our impact andhow to implement our reporting. In our view whileproviding impact data is helpful, its role is in supportof, not ahead of, qualitative evidence of impact. Wetook steps in 2015 to share how we approach impactwith external audiences, and learn from the workothers are doing. We intend to develop this further inthe next three years in a shift from a focus purely onreporting impact to how we manage impact moreeffectively in the business itself. The latter is bestunderstood through storytelling, as Triodos Bank triesto do in its impact chapter in its online annual report –www.annual-report-triodos.com.
We also played an active role co-developing the GlobalAlliance for Banking on Values scorecard sostakeholders can better understand the sustainabilityof different banks. We once again published thescorecard in full in our annual report. Other GABVmembers banks have also agreed to publish theirscorecards together, on a special website in 2016.
Risk
Because our starting point is to deliver greater impactover the long term, it is essential that we arefinancially resilient and that, as an outcome, we haveconsistently been focussing on a high quality loanportfolio. Triodos Bank’s modest risk appetite is animportant building block towards this resilience.
Historically we have delivered a high quality loanbook, which means relatively few borrowingcustomers were unable to repay the loans we made.
The banking industry, at least in its core functions,tends to reduce risk. However, some risk is required todeliver change and development. We have been askedby stakeholders to reconsider our risk approach toachieve more impact, and we will. However, it’simportant to understand that increased impact doesnot necessarily mean greater risk and lower returns.In fact, because of impact’s inherently long-termperspective, increased impact in our view can meanlower risks and better returns over time.
Return
Triodos Bank has been able to deliver stable, fairreturns over a sustained period. Nevertheless in 2015Triodos Bank faced stiff competition fromconventional banks with a growing interest insustainability as a market opportunity. For this reasonwe experienced increasing competition for strongsustainable businesses looking for finance. Inaddition entrepreneurs continue to feel uncertainabout the future, in terms of markets and governmentpolicy affecting their sectors and are reluctant toinvest and to borrow money. And while interest ratescontinue to be extremely low, bank’s business models,including Triodos Bank’s, can be adversely affected;this is particularly true when liquidity surpluses need
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to be invested at negative interest rates. Despite thiswe were able to continue to grow our sustainable loanportfolio, by 13% in 2015. The total loan portfolio,including short term lending to municipalities,increased by 22%.
Triodos Bank has a balanced business overall whichalso benefits from a successful Impact Investmentarm, Triodos Investment Management, whose assetsunder management grew by 19% in 2015.
A resilient institution with impact at its heart
Combining Impact with Risk and Return reflectsTriodos Bank’s values based approach. It exists tobenefit people, the environment and culture and is abusiness that integrates non-financial impact andfinancial performance. But, for Triodos Bank, financialperformance is important because being a resilientfinancial institution is essential to delivering lasting,sustainable change.
Our stakeholders understand this, as the materialityanalysis below shows. Maintaining a resilient bank isalso reflected in the strategic objectives that follow.These objectives describe how we deliver positiveimpact and how we plan to in the future. They are alsoa reflection of the views of our stakeholders andTriodos Bank itself.
To maintain our position as a robust financial institutionwe maintained a strong capital position (CET1 ratio of19%) and managed growth in lending, deposits andinvestments during the year. These collective effortsmeant Triodos Bank’s total assets under managementwere EUR 12.3 billion by the year end.
Maintaining a healthy balance between lending andthe strong influx of deposits, while continuing todiversify our loan portfolio, continues to be achallenge. Sustainable mortgages continued to growand contribute to this effort. Our mortgagesincentivise home-owners to live in more environ-mentally friendly properties. This part of the businessgrew by 52% during the year, helping to deliver a ratiobetween sustainable loans and deposits of 62%.
We are also required to fulfil increasing regulatoryobligations. This meant we continued to put significant
effort and resources into this work during the year, andbenefited from strengthened risk management teamsand more robust internal governance structures.Ultimately regulation should not limit our ability toengage with customers. Regulation should notundermine dialogue with customers when, for example,it becomes an exchange of protocols. We put effort intoconstructive conversations with regulators and thewider public in 2015 to make this case to help makesure regulation is both proportional for smaller andmedium sized banks, and effective.
Our Stakeholders and whythey Matter So MuchTriodos Bank’s resilience is also bolstered by engagingproactively with our stakeholders. We have benefitedfrom open discussions with our stakeholders for manyyears and in varied ways from client days connectinghundreds of customers in all the countries where wework, to depository receipt holder meetings andsurveys. But while some organisations ask theirstakeholders what they think they should do, and thendo it, Triodos Bank takes a different approach.
Our starting point, for everything we do, is our essence.It is about who we are and is, therefore, one of ourstakeholders. And it is key to our conversations withour stakeholders.
In this context, and in addition to numerousinteractions with stakeholders during the year, wefollow a formal process considered to be best practiceby a large number of companies to create an analysisof the issues that are most important both to ourstakeholders, and ourselves. This approach followsthe Global Reporting Initiative’s G4 guidelines.
Increasingly companies are encouraged to focus theirsustainability reporting in this way, rather thanreporting on a wide range of issues, some of which willbe relatively unimportant to an institution’s overallimpact. We welcome this focus on what is mostmaterial, rather than a broad check-list of more andless relevant factors. These issues are highlighted in amateriality analysis below following structureddiscussions with our stakeholders.
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Materiality Matrix
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From our engagement activity it became clear that ourstakeholders and Triodos Bank find many of the sameissues important. As a result we could not identify anyissues that were of very high importance to one party,and very low importance to another. This leads us toconclude that the bank and our stakeholder’s areas ofinterest are aligned. At the same time, among ourstakeholders there is consistently more interest inwhat we ‘do’ as an organisation than how we behave ina responsible way as an institution.
Triodos Bank’s three stakeholder groups are definedas the following:• Those that engage in an economic relationship withthe business (e.g. customers, depository receiptholders, co-workers and suppliers)• Those that don’t engage in economic transactions,but who maintain a close interest in Triodos Bank (e.g.NGOs, governments, the media and the communitieswho benefit from our finance) from a societalperspective• Those that provide new insights and knowledge (e.g.advisors and inspirers), prompting us to reflect,rethink and explore new territory.
This year’s materiality analysis is more internationalthan last, including the results of a survey distributedin all the countries where we work. We also undertookfive qualitative and professionally moderatedindividual interviews with stakeholders in Belgium aswell as a stakeholder meeting with representativesfrom Triodos Bank’s three stakeholder groups, andindividual interviews, hosted at Triodos Bank’s HeadOffice.
The results suggest Triodos Bank’s stakeholders wantand expect Triodos to continue to be a leader insustainable finance, with a strategy that reflects andsupports its mission. In addition, impact investments(in this sense combining both lending and investing insustainable enterprises), and delivering sustainablefinancial services, continue to be considered to be veryimportant both by Triodos Bank and its stakeholders.We share some of our stakeholders’ interest inadapting our approach to risk, where appropriate, toincrease our impact overall. Our focus on innovation is,in part, a response to this shared goal.
The analysis shows our stakeholders think it isimportant that Triodos Bank acts as a thought leaderin values-based banking. We also believe TriodosBank should play a role in this way, acting as areference point for the banking sector because thiscan amplify our impact, by influencing the debateabout how to improve the banking system forexample. We also share the priority that ourstakeholders give to helping our borrowing clients tobecome even more sustainable. You can findexamples, including interviews with borrowers, inTriodos Bank’s online annual report at www.annual-report-triodos.com.
It is notable that being a pan-European bank was arelatively low priority for our stakeholders in thesurvey. However, when tested in an in-person meetingstakeholders attached considerable importance toTriodos Bank’s European presence. A high proportionof respondents couldn’t, or didn’t, answer thisquestion in the survey, suggesting it may not havebeen well understood. As a result its importance tostakeholders may be underestimated on the analysisin the graphic here.
Unlike larger mainstream banks, remuneration wasonce again a relatively low priority for ourstakeholders and the bank. This may reflectsatisfaction with the prevailing approach toremuneration at Triodos Bank and suggests that itspolicy is well understood. Triodos Bank does not offerbonuses and has a relatively low difference betweenthe highest and lowest salary, for example. For moredetails of our remuneration policy and a more in-depth analysis of the results, please seewww.annual-report-triodos.com.
We will use the results of this stakeholder engagementactivity, as well as the examples detailed here, directlyin the development of our strategic objectives. Theresults will also inform our work more generallythroughout the year, as a reference for new ideas andthe development of existing activity. In particular,longer-term we intend to deepen our stakeholderengagement activity in general, and will use this workas a basis from which to progress this work.
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Our key strategic objectives How we did in 2015
To continue to ensure that what we do reflectswho we are; integrating our mission and strategy.
Strategy plans for the three key business pillarsdesigned and implemented to clearly represent howwe will meet our mission.
Finalised Triodos 2025, our long-term strategicperspective, used as the context for our strategydevelopment process for the 2016-2018 businessplan. We will publish the findings of this 10 yearperspective work externally in 2016.
To be recognised by key influencers as areference point for values-based banking,contributing to the development of a morediversified, transparent and sustainable bankingsector.
Continued to play a strong role (as Chair) in the GABVand a pro-active role in the Sustainable Finance Laband other key bodies.
Continued to be Member of the Board of the NVB (theDutch Banking Association).
Co-chaired the European Task Force on Banking andMember of the UNEP FI Steering Committee, andlaunched major report to promote positive impactwithin the financial sector at Paris COP21 conference.
New membership of the B Corporation – providingcertification for companies aimed at benefitingsociety and not just shareholders, hosting theorganisation’s European launch.
Strategic ObjectivesThe table that follows provides the key strategicobjectives for Triodos Bank for 2015 and our progressagainst them. We have divided this section betweenan update on strategic objectives to date, plus aseparate section describing the key new objectives ofthe three year plan from 2016-2018.
This reflects three year plans that have been writtenas a result of the strategic goals that were developedfollowing the 10 year strategic perspective workdescribed above.
This information is designed to reflect some of the keyissues raised in the materiality analysis that arepriorities for Triodos Bank and our stakeholders.
Triodos Bank
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Engaging with clients and stakeholders. Stakeholder engagement process internationalisedvia a survey delivered in all countries, and qualitativeinterviews and a stakeholder event in Belgium andThe Netherlands respectively.
Client and depository receipt holder meetingsdelivered in all countries, with more consistentapproach across all branches.
Depository receipt holder survey undertaken andresults published, with 4,500 participants (out of32,500).
Theme day on sustainable real estate hosted with co-workers, management, Supervisory Board, Board ofSAAT and external parties.
To grow our impact by maintaining a clear focuson financing sustainable business.
Loans to deposits ratio (when calculated to onlyinclude our impact lending) decreased from 63% in2014 to 62% in 2015.
Diversified our loan portfolio including thedevelopment of new subsectors, for exampleproviding finance for our first power storage projecton Corsica.
We launched the Multi Impact Fund, making impactinvesting more accessible to retail investors (NL) andcontinued our efforts to broaden participation inImpact Investing for retail audiences across Europe byresponding to the EU consultation on Capital MarketsUnion.
Continued to only finance loans with customer’ssavings, and not through money market facilities fromother banks.
To become the ‘bank of preference’ for ourcustomers.
In order to become the first bank for our customers,the development of the current account in the UKmarket for launch in 2016 is under way. The fullaccount launch date is now likely to be in early 2017.
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To strengthen and continue to develop a Pan-European base.
In Spain the development of a new ICT platform wasunderway with final implementation carried forwardto 2016.
The creation of a full branch in France continues to beinvestigated.
A Vision Renewal Programme was developed tosupport the Theme Day on Sustainable Real Estate tostrengthen this area across all branches in 2015;similar development programmes are planned for2016-2018.
New, public-facing office opened in Gent, Belgium.
German profitability improved however the Germanbranch has still not reached break-even point.
Group-wide Internal Governance changes developedin 2014 were fully implemented in 2015.
Central Directors of Business Banking, Marketing,Retail Banking and Operations appointed tostrengthen Pan-European approach.
Two new commercial offices opened in Spain, againstplans of four to six.
To focus on long-term resilience over short-termprofit, and offer a fair return on equity.
Delivered a return on equity (RoE) of 5.5%. TriodosBank maintains a relatively high equity base and hasa substantial liquidity surplus which results in a lowerRoE.
Leverage ratio of 8.4% delivered, compared to aminimum of 3% required in Europe.
To deliver a stable balance sheet, by increasingthe diversity in our loan portfolio.
Sustainable mortgage lending was responsible for40% of the total increase of the sustainable loansportfolio in 2015 (2014: 18%). In 2015 this meant anincrease from EUR 404m to EUR 616m.
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To encourage co-workers to actively engage in alearning organisation.
Cross-bank collaboration and engagement platformdeveloped during the year but carried forward for roll-out in 2017.
Cross-bank theme day on sustainable propertydelivered, sharing knowledge from mature brancheswith newer ones.
Values and Essence study group meetings werepiloted for new co-workers.
Average training days per co-worker increased from4.3 to 4.6 in 2015.
A more international head office delivered with theappointment of multiple international appointmentsat different levels in the organisation, as well as long-term secondments from head office to the branches.
Values seminars delivered three times in 2015 for co-workers with 1-3 years service.
Multiple learning opportunities, including aLeadership Conference (NL) and co-workerconference (UK) delivered during the year.
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Our key strategic objectives How we did in 2015
Triodos Investment Management will deepen andextend its impact, further building on its positionas the experienced and professional impactinvestment partner of preference.
Total Assets under Management amounted toEUR 3.14 billion from solid inflows in most funds.
See www.annual-report-triodos.com for detailsof Triodos Investment Management’s impact.
Triodos Investment Management will continue todevelop new impact investment solutions.
On 1 December 2015 Triodos InvestmentManagement launched Triodos Multi Impact Fund, afund-of-impact-funds for private investors in TheNetherlands.
Despite challenging developments on the stockmarkets, the Triodos SRI funds were able to growsignificantly and the development of themethodologies of these funds has progressed furtherduring 2015.
Our key strategic objectives How we did in 2015
Develop Private Banking through meaningfuldialogue, as an important addition to TriodosBank’s retail offering to meet the demand for anholistic approach that combines financial advice,financial returns and personal values.
Investable assets for this client group grew in linewith total growth of Triodos Bank Private Banking in2015.
We organised an interactive meeting with our privatecustomers to discuss the future of our foodproduction, attended by more than 100 clients.
Triodos Investment Management
Triodos Bank Private Banking
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Strategic Objectives within the2016-2018 Business Plan Goals for 2016-2018
Finance for Impact
We want to have delivered more finance – by wayof loans, investments and gift money – to achievea positive Impact:
• Diversify our loan sectors to extend impact andspread risk• Clearly communicate our vision on how we helpsectors make step changes in their sustainabilityand our objectives, and progress to deliverpositive impact• Grow our investment funds significantly• Significantly increase our capacity to supportinnovative initiatives with gift money.
Focus on loan growth – with a target of 15 to 20% netgrowth in lending.
Develop new sectors and sub-sectors in order todiversify our portfolio and remain relevant to theneeds of society.
Deliver initiatives including Sustainable Funding andService Network to help provide alternative financialsolutions for clients and Heart-Head impulsesessions (NL) to create learning communities forentrepreneurs.
Communicate our vision for the development ofspecific sectors, providing a framework for thecontribution to impact we are seeking to make.
Triodos Investment Management aims to grow itsassets under management to EUR 3.6 billion in 2016.It aims to build a more balanced portfolio of impactinvestment funds realising impact in key areas relatedto the UN Sustainable Development Goals, with afocus on human dignity and development andresponsibility and care for the earth.
Private Banking will investigate connecting individualPrivate Banking clients with social entrepreneurs inneed of finance.
Private Banking will also evaluate investment serviceswith the aim of offering clients an online investmentguiding application. The application should combinean easy to use portfolio management tool withrelevant information on the impact of Triodos fundson sustainable development. Introduction is plannedfor 2017.
Expand Triodos Foundation activity in severalcountries through crowd funding and other activitiesrelated to Gift Money.
As described above, Triodos Bank has developed a forward looking plan and strategic objectives for the nextthree years, built on a ten year perspective developed during 2014 and 2015 and designed to continue to enableit to deliver its mission in the future. Key elements of this plan follow below. We plan to report on our progressagainst these objectives from next year onwards:
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Broaden our Scope
We want to broaden the scope of our productsand service offering: complementing our existingservices so that we can respond flexibly to a widespectrum of customer needs within arelationship-based approach.
In the UK a personal current account will be furtherdeveloped for launch in 2017, together withdevelopments in the product range of other branches.
A decision about whether to open a full branch inFrance will be taken in 2016.
Four new commercial offices to be opened in Spain.
Theme days to continue in 2016 to cover our servicesto entrepreneurs beyond property-secured lending.
Triodos Investment Management aims to expand itsinternational distribution network and have a resilientand diversified investor base. It aims to expand withinexisting funds and create new values-basedinvestment solutions.
Triodos Investment Management will proceed withfurther exploring the development of its SRI funds.And by 2018, it aims to offer an impact investmentportfolio with all asset classes being represented viaboth direct and publicly traded investments.
Expand Triodos Foundation activity in severalcountries through crowd funding and other activitiesrelated to Gift Money.
Deepening our Relationship Approach
We want to have transitioned to a point wherewhat we offer is driven more by our customers’needs rather than our products.
We want to build interconnected stakeholdercommunities where we make connections andare the catalyst for productive discussionsbetween our customers.
Deliver broader client relationship initiatives, to helpprovide alternative financial solutions for clients andcreate learning communities for entrepreneurs.
Enhance our client and stakeholder relationships witha full review of Triodos Bank's online presence, anddevelopment of a marketing intelligence project inorder to deepen our understanding of our clients andtheir needs.
Extend stakeholder engagement process, delivercombined client and depository receipt holdermeetings and Group-wide survey.
Innovating: new ventures and partnerships
We want Innovation to become core to thebusiness within each business unit, with a clearinnovation process in place and secure allocationof resources.
New ventures should be launched withinidentified “innovation focus areas”.
Develop new initiatives which go beyond the bank witha focus on innovating new ventures and partnerships,co-developed with clients and stakeholders. Suchventures to form part of a balanced portfolio as partof the bank’s future business model.
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Resilient and effective business operations
In 2018 we want to have further strengthened theresilience and effectiveness of our (business)operations in order to meet the expectations ofcustomers and society and in order to bedemonstrably in control at acceptable costlevels.
Internal processes within business units and internalfunctions will be reviewed to optimise efficient workpractices.
We will develop our online presence and align ourprocesses to customer needs to make things assmooth as possible for customers – to meet rapidlyevolving customer experience expectations.
Becoming a Learning Organisation
By 2018 we want the mission and essence ofTriodos Bank to be better understood, andengaged with, across the co-worker community.
We want co-workers to benefit from an open,collaborative culture “inside and out” with aflexible organisational structure that enableslearning, exchange and the development oftalent.
Implement a new internal online platform across thebank to improve collaboration on joint topics.
Stimulate and support exchanges betweendepartments and international offices, and withmember banks of the GABV, creating a more dynamicworking environment, by improving the practicalarrangements around these efforts.
Extend the Triodos Academy covering all aspects ofmanagement development across the Group and theValues Education Programme to support theembedding of values and our essence in our dailywork.
Improve our approach to talent development,identifying and supporting co-workers throughout theorganisation.
Initiating dialogue with society on positive change
We want to create conversations, at multiplelevels, about the role of money and finance increating a positive impact in the world. And wewant to share our vision of how people can makea difference through the conscious use of money.
Continue key, established partnerships and deepenand extend the impact of Corporate Partnerships,including links with academic institutions andbecome more active in targeted European bodies tofurther the sustainable finance agenda.
Learn from and collaborate with externalstakeholders in new development and innovationprogrammes.
Balanced Portfolio of Impact-Risk-Return
We want to see each Business Unit managing abalanced portfolio of activities, managing ourImpact-Risk-Return profile so that we extend ourimpact within an acceptable risk/returnframework.
We want to maintain the stability of the Group’sRoE.
Improve loans to deposit ratio to between 65 and70%.
Develop a system to categorise impacts in aconsistent way across the group. We will build on ourexisting impact reporting to drive positive impactthrough our management processes.
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ResultsIn addition to a summary of key figures at the start ofthis report, the following are the main resultsachieved in 2015 together with details of TriodosBank’s Divisions, its products and services, theirbroader impact, and prospects for the coming years.Because Triodos Bank integrates its values-basedmission and strategy these results combine bothfinancial and non-financial performance. They aredesigned to provide you with an insight into what ourmission and strategic objectives have translated intoin practice.
Triodos Bank
In 2015, Triodos Bank’s income grew by a satisfactory12% to EUR 212 million (2014: EUR 190 million).Triodos Investment Management and InvestmentAdvisory Services contributed EUR 31 million to thisfigure (2014: EUR 31 million). In 2015, commissionincome amounted to 32% (2014: 33%) of total income,in line with expectations.
The total amount of assets under managementincluding Triodos Bank and the investment funds andPrivate Banking grew by EUR 1.7 billion, or 16%, toEUR 12.3 billion, above expectations.
Triodos Bank’s balance sheet total grew by 15% toEUR 8.2 billion thanks to a steady growth of the fundsentrusted and new capital raised during the year, inall branches. This represents a very positive outcomegiven growth of 5 to 15% was expected.
Triodos Bank’s total number of customers increasedby 15%, against expected growth of between 10 to15%, and now numbers 607,000 customers.
Last year we refined the definition of a customer sothat this data is reported more consistently andaccurately across all branches. We will continue toreport the number of accounts in the annual report’sKey Figures section.
Continuing growth in deposits despite extremely lowinterest rates shows that a growing number of peopleare choosing to make a much more conscious choiceabout their bank and how it uses their money.
Operational expenses increased by 9% during theyear. Without taking into account various netcontributions made in 2014 and 2015 to the rescue ofbanks (including a special tax to rescue the DutchSNS Bank in 2014), the increase of expenses wouldhave been 15%. Operational expenses were in linewith expectations. Growth has resulted from thegrowth of activities and meeting regulatoryrequirements.
The ratio of operating expenses against income was71% (2014: 73%). Profit before tax and impairmentsfor the loan portfolio increased to EUR 61.4 million(2014: EUR 51.2 million). The impairments for the loanportfolio decreased from EUR 11.1 million in 2014, toEUR 7.6 million.
The net profit is EUR 40.7 million, up by 35% (2014:EUR 30.1 million).
Impairments for the loan portfolio decreased to 0.16%of the average loan book, compared to 0.28% in 2014,reflecting a high quality loan portfolio in all branches.This continues to be favourable and in line with ourhistorical track record which is relatively low.
Triodos Bank delivered a Return on Equity of 5.5% in2015 (2014: 4.4%). So far the medium-term objectivehas been to grow the return on equity to 7% of TriodosBank’s equity in normal economic conditions. In thatrespect the 2015 return is satisfactory. This targetshould be seen as a realistic, long-term average forthe type of banking activity that Triodos Bank engagesin. However, we recognise that market conditions havechanged. If the current trend of very low interest ratesand increasing regulatory costs and capitalrequirements continues, a lower Return on Equity willbe a much more likely outcome. In this context TriodosBank will aim for a Return on Equity of between 3%and 5% in 2016.
In the current market, while Triodos Bank will continueto work on improving its profitability, it does not expectto outperform easily this target over the next threeyears; not least because investments will be made inthe development of Socially Responsible Investment(SRI), the launch of a current account in the UK and thepossible opening of a fully fledged French office in the
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coming years in particular. As capital and liquidityrequirements may increase even further, we prefer tocontinue to maintain a relatively high equity base and asubstantial liquidity surplus which puts downwardpressure on the Return on Equity.
Earnings per share, calculated using the averagenumber of outstanding shares during the financialyear, were EUR 4.40 (2014: EUR 3.41), a 29% increase.The profit is placed at the disposal of theshareholders.
Triodos Bank proposes a dividend of EUR 1.95 pershare (2014: EUR 1.95). This means that the pay-outratio (the percentage of total profit distributed asdividends) will be 44% (2014: 57%). Our policy is tohave a pay-out ratio of between 50% and 70% todeliver stability. Although 2015 has been an unusuallygood year, we have maintained the dividend at EUR1.95 per share, even if that brings this year’s pay-outslightly below the 50% ratio of the policy.
Triodos Bank increased its share capital byEUR 40 million, or 7%, thanks to depository receiptissues targeting retail investors in particular, whichran throughout the year in The Netherlands, Belgium,the United Kingdom, Spain and Germany.
The number of individual depository receipt holderscontinued to increase in 2015 at the same time assome institutions, mainly pension funds, sold theirparticipation. Overall growth has been satisfactoryand sufficient to meet capital requirements. Thenumber of depository receipt holders increased from32,591 to 35,735. Equity increased by 11% fromEUR 704 million to EUR 781 million. This increaseincludes net new capital and retained net profit. In2015, Triodos Bank’s platform for trading in depositoryreceipts continued to operate effectively. At the end of2015, the net asset value for each depository receiptwas EUR 81 (2014: EUR 78).
At the end of 2015 the total capital ratio was 19.0%(2014: 19.0%). Triodos Bank aims for a solvency ratioof 16%. The Core Tier 1 ratio was 19.0% (2014:19.0%). The solvency ratio remains strong.
Our Impact
Triodos Bank wants to report on the wider social,cultural and environmental impact of its finance. Weaim to be a leader in impact-driven reporting in thefinancial industry.
As part of that effort we have further developed theimpact chapter, including new impact data, and havefor the second time included impact data in the scopeof the external assurance on the full Executive Boardchapter. Doing so is a logical extension of the auditingof our financial figures, as an integrated business thathas sustainability at the core of its financial activity.
The impact data, which is reported by all branchesand Triodos Investment Management where possible,is based on a number of assumptions explained indetail in the online annual report (www.annual-report-triodos.com). In general the full impact of aproject is counted when Triodos Bank has financed it,either wholly or in part. When there is someuncertainty about an impact figure relating to aproject, we exclude it.
In 2015 we also co-created a detailed impact reportingmanual within the organisation to standardise andintroduce further rigour into how and what impact datawe report, as a matter of continuous improvement.These improvements have led, in some cases, torevisions of impact data definitions and morecomprehensive reporting of data. This has had asubstantial influence on some measures, effectingthe data in 2015 and, in some cases, requiringrestatements of 2014 data. Where this has happenedwe have marked these figures as “restated”.
The impact data, which is reported by all ourbranches, is based on a number of assumptionswhich we explain in detail in our online annual report.In general, we take a conservative approach to thedata and exclude projects when we are uncertainabout the impact figures relating to them.
This data serves as an indication of Triodos Bank’snon-financial impact. While numbers alone can onlytell a limited story, they do provide quantitative detailsof the impact of Triodos Bank’s mission in practice.
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Please visit www.annual-report-triodos.com to viewthe impact chapter providing more detail on theimpact of Triodos Bank and its finance, including themethodology used to produce the impact datarecorded here.
Environment
Renewable energy
Triodos Bank and its investment funds, offered viaTriodos Investment Management, finances enterprisesthat augment the use of renewable resources inparticular and supports projects that reduce thedemand for energy and promote energy efficiency. Bythe end of 2015, Triodos Bank and its climate and energyinvestment funds were financing 358 projects acrossEurope (2014: 362, restated figure), contributing to agenerating capacity of 2,100 MW of energy(2014: 2,100 MW). During the year these projectscontributed to 1.5 million tonnes of CO2 reduction whilegenerating green energy equivalent to the electricityneeds of 1 million European households (2014:0.9 million, restated figure).
Organic farming and nature development
The organically managed land on the farms whichTriodos Bank and Triodos Investment Managementfinanced in 2015 could produce the equivalent of33.6 million meals in 2015, or enough food to providea sustainable diet for approximately 30,700 people(2014: 27,700, restated figure because of an updatedconversion factor). Together they financedapproximately 36,500 hectares of organic farmlandacross Europe. This means one football-pitch sizedpiece of farmland for every 10 customers, each oneproducing enough for 550 meals per year.
We also finance 24,000 hectares of nature andconservation land. That is around 400m2 of natureand conservation land for every customer.
Sustainable property and private sustainablemortgages
As well as offering green mortgages that incentiveshouseholds to reduce their carbon footprint, TriodosBank and Triodos Investment Management finances
new building developments and refurbishmentprojects for properties to reach the highestsustainability standards.
In 2015 Triodos Bank and Triodos InvestmentManagement financed directly, and via sustainableproperty, approximately 4,500 homes and apartmentsand about 310 commercial properties comprisingapproximately 280,000m2 of office and othercommercial space.
Social
Health care
As a result of its lending across Europe around25,000 individuals (2014: 20,000) used facilitiesoffered at 341 elderly care homes financed by TriodosBank and Triodos Investment Management in 2015;that means the equivalent of 15 days of care werefinanced for each Triodos Bank customer.
Community projects and social housing
In 2015 Triodos Bank and Triodos InvestmentManagement financed 316 community projects, and169 social housing projects, which directly andindirectly provide accommodation for approximately12,400 people.
Microfinance
Triodos Investment Management’s specialisedmicrofinance funds provided finance to 100microfinance institutions (2014: 102) in 45 countries(2014: 44). These organisations reached approximately10.2 million savers (2014: 8.2 million) and 15.5 millionborrowing clients in 2015 (2014: 11 million).
Culture
Arts and culture
During 2015 Triodos Bank and Triodos InvestmentManagement finance helped make it possible for14.3 million visitors (2014: 7.2 million, restated) to enjoycultural events including cinema, theatres andmuseums across Europe, as a result of its lending andinvestments activity to cultural institutions. This
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means that there were the equivalent of 23 culturalexperiences for each Triodos Bank customer. Thismarked increase was largely due to some significantnew loans in Spain.
Triodos Bank and Triodos Investment Managementfinance helped approximately 3,000 artists and peopleactive in the cultural sector as well as financing anumber of organisations providing spaces for culturalactivities such as workshops and music courses.
Education
Approximately 986,000 individuals benefited from thework of educational establishments financedby Triodos Bank in 2015 (2014: 822,000). So for everyTriodos Bank customer, the equivalent of 1.6people benefited from education provided by anestablishment we financed.
Prospects
Triodos Bank will develop its work on the basis of anew three year plan which begins in 2016. The planwill focus on exploring opportunities beyond itstraditional core banking, developing more innovativeapproaches to sustainable finance, deepening itsrelationship approach and becoming more of alearning organisation.
Excluding unforeseen circumstances, Triodos Bankexpects a lower operational profit in 2016 mainly dueto the sector-wide introduction of a contribution tothe Dutch Deposit Guarantee Scheme, lower interestmargins and substantial investments in the business.Triodos Bank will extend its impact through a morediversified loan portfolio, quality financial serviceswith sustainability at their core and encourage andprovide finance for enterprises increasing thesustainable impact of their business. We recognisethat the economic downturn that has resulted fromthe financial crisis, and a slow recovery in somecountries, will continue in 2016 and may have anadditional impact on Triodos Bank’s results. Becauseof these factors, Triodos Bank expects to deliver alower net profit in 2016 compared to 2015.
Co-worker ReportTriodos Bank aims to be an extraordinary place towork, enabling co-workers to fulfil their professionalpotential, developing and applying their expertise andprofessional insight to the full.
The year at a glance
Triodos Bank is an organisation in development. Itssteady growth has created a medium-sized bankrequiring an evolving approach to fulfil the potential ofthe people who work in it. In 2015, 253 new co-workerswere employed (2014: 199). The total number of co-workers at Triodos Bank increased by 10.2% in 2015,from 1,017 to 1,121, partly because of growth and partlybecause of a step-up in control and risk management.
The balance of men and women, the age of the co-worker group and levels of sickness is similar toprevious years and remains at a reasonable level inthe view of the management. In 2015 Triodos Bankemployed 589 women (52%) and 532 men (48%). Theshare of women in management positions is 37.5%.The average age is 40.4 years (2014: 39.6) and theaverage period of service continued to be 4.8 years atthe year end. Absenteeism through sickness was2.7% in 2015, below a target of 3%.
The attrition rate increased to 14% in 2015 (2014:9.5%). The attrition rate for co-workers in their firstyear of employment increased from 11.6% in 2014 to15.8% in 2015. This was, in part, due to a changinglabour market and a strong local competition for jobsin some countries, particularly in Spain and the UK.Nevertheless the increase is a matter of concern andwill be addressed.
Triodos Bank depends on skilled and motivatedpeople who integrate the bank’s mission in theireveryday work.
The organisation therefore invests in high qualitytraining and development programmes that focus onthe specific questions and training needs of its co-workers. In addition to external experts, the TriodosAcademy offers development programmes based onTriodos Bank’s values. 88 co-workers (2014: 118)participated in the Academy’s programmes in 2015.
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Special meetings were introduced during the year tocreate a more in-depth understanding of TriodosBank’s roots and its values, and to support new co-workers to reflect on societal issues and theirrelevance for Triodos Bank. In 2015 three co-workersalso participated in a new leadership programmefrom the Global Alliance for Banking on Values. Inaddition, the 2015 annual Co-Worker Conference tookplace in Bristol with a theme of “Greening Capital”,and was attended by 115 co-workers.
Triodos Bank believes people should be properly andappropriately paid for their work. As such it carefullymonitors differences in remuneration within theorganisation and between Triodos Bank and the rest ofthe financial and banking sector, and wider society. InThe Netherlands, which is home to the ExecutiveBoard, the head office and the Dutch branch, the ratiobetween the lowest and highest paid in 2015 was 9.8(2014: 9.6). To provide a more comprehensive view ofremuneration at Triodos Bank this year we have alsoreported the ratio of the highest full-time salary to themedian full-time salary, in the Key Figures section atthe start of this report.
Emphasis was put on the culture and integrity ofbankers during the year, with the implementation of a‘Banker’s oath’, made by all co-workers in TheNetherlands. Although the oath and correspondingdisciplinary ruling is new, the principles and ideasbehind it are fully in line with Triodos Bank’s BusinessPrinciples, which are endorsed by all its co-workers.
Prospects
Triodos Bank will continue to strengthen theorganisation in 2016 and beyond. The followingpriorities have been set in this context:• New capabilities will be developed and the essenceand values of the bank more deeply embedded as partof efforts to support the implementation of thebusiness plan 2016-2018 in daily working life• Co-workers will be encouraged to actively engage ina learning organisation by creating learning andexchange opportunities both within the organisation,between countries and with external partners
• A new collaboration platform (‘Engage’) will beimplemented to improve the facilities for workingtogether and co-creation• Triodos Bank’s positioning as an employer will bestrengthened and its approach to talent developmentdeepened to allow for further growth of theorganisation and to meet future challenges.
Environmental ReportIn addition to the positive impact of financingsustainable enterprises that safeguard theenvironment, and actively engaging in developingindustry-wide improvements to how carbon ismeasured and reported as highlighted earlier in thereport through the Dutch Carbon Pledge, Triodos Bankalso continuously aims to reduce its impact on theenvironment as an institution itself. This scope goesbeyond its own activities to include its choice ofsuppliers, products and services.
2015’s environmental figures in a nutshell
The overall CO2 footprint per FTE decreased by 12%(2014: 8%) in 2015. Business travel by air wasresponsible for 37% of Triodos Bank’s overall footprintand decreased by 8% per FTE, building on a 20%reduction per FTE in 2014. Triodos Bank co-workerstravel by air to partner institutions in developingcountries, and for essential in-person meetings andtraining between business units. Not all these eventscan be replaced by videoconferencing so, ultimately, alower limit (per FTE) to flight reductions will bereached. The use of videoconferencing continued toincrease during the year and was up by 13%.
The use of office paper per FTE increased by 26%.Printed paper, which accounts for 86% of all paperused (in marketing materials, for example) decreasedby 22% per customer, while the number of customersgrew by 15%. Triodos Bank’s key environmental keyperformance data can be found in the appendix onpage 191.
Triodos Bank offsets any unavoidable CO2 emissionsand is a climate-neutral organisation.
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Understanding our CO2 footprint
In 2015, a group-wide three year plan began to improvethe measuring, reporting and verification of TriodosBank’s environmental data. The CO2 managementsystem was rolled out across the group and will providemore timely and detailed feedback on the impact ofCO2 improvement initiatives during 2016.
An independent CO2 benchmark (executed during2015, so based on 2014 data) also showed thatTriodos Bank performed better than its peer group onthe use of electricity, both per m2 (down 26%) per FTE(down 3%) and travel by car per FTE (down 4%). Areasidentified for further reductions include businesstravel by air, paper usage and using available officespace more efficiently.
Sustainable Property
Triodos Bank’s office buildings influence itsenvironmental impact. Many of them have beenassessed using BREEAM methodology and rated as‘very good’ in three key areas; sustainable management,the building itself and use of the building. Current goodpractice will be written into formal policies as anoutcome of this work. BREEAM assessment of theremaining buildings will take place in 2016.
Engaging the supplier community
Triodos Bank’s approach to sustainable procurementis to maintain a dialogue with suppliers to furtherreduce the use of resources and energy throughoutthe value chain by, for example, minimising transportby using packaging or products that are by designeasy to repair, repurpose, reuse or to biodegrade.
Prospects
• Use insights into the drivers of our CO2 footprint toidentify additional CO2 reduction initiatives• Execute the BREEAM assessment of the remainingbuildings in 2016• Share results and joint successes with suppliers tofurther reduce Triodos Bank’s impact on theenvironment.
Triodos Bank Divisions and ResultsTriodos Bank’s activity is split between three coredivisions. The following chapter provides an overviewof our work in 2015 in each of these divisions,including a short description of each, key sub-sectorsand how they performed during the year, as well asprospects for the future:• Retail and Business Banking, delivered through adiversified network of European branches,responsible for around 84% of Triodos Bank’s netprofit in 2015;• Triodos Investment Management and InvestmentAdvisory Services, which makes up 15% of TriodosBank’s overall net profit;• Triodos Private Banking, providing services towealthier people and groups, available in TheNetherlands and Belgium to date.
Products and services are offered to investors andsavers, across these three divisions, enabling TriodosBank to finance new and existing companies thatcontribute to the improvement of the environment, orcreate social or cultural added value. Details of theseproducts and services follow below.
European Branch Network(Retail and Business Banking)
Developing a European branch network is funda-mental to Triodos Bank. It allows it to build and shareexpertise, and use it to benefit a fast-growing TriodosBank community. It brings a credible set of values-based financial services to hundreds of thousands ofbusiness and personal customers, and growssustainable banking’s scale and impact.
While Triodos Bank’s values bind customers and co-workers, there are important differences betweencountries. Regulations, tax incentives and govern-ment approaches to sustainability are sometimesmarkedly different in diverse markets. Local culture,within and between countries, also impacts on howTriodos Bank approaches its work.
Retail activities developed further in 2015 as peopleand sustainable enterprises continue to choose topartner with Triodos Bank.
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Funds entrusted
Funds entrusted, including savings, enable TriodosBank to finance companies and organisations thatbenefit people, the environment and culture. Anincrease of the funds entrusted is an importantindicator of Triodos Bank’s ability to attract sufficientfunds to finance sustainable organisations.
Triodos Bank’s branches offer a variety of sustainablefinancial products and services as part of its keystrategic objective to offer a full set of services tocustomers. This has been achieved in some branchesand is being developed in others, leading to a markedgrowth in funds entrusted which increased byEUR 994 million, or 16%, against expected growth of10%. We are satisfied with the controlled growth of thefunds entrusted given the growth of savings andliquidity in markets and with our (potential) customers.
Together, this resulted in continuing growth in all thecountries where Triodos Bank operates due in part toa growing profile, more efficient and customer-friendly account opening processes, and a receptivemarket keen to use their money more consciously.
By offering our savers, in some countries, theopportunity to donate part of the interest they receiveto a charity, many social organisations receivesupport every year. In 2015, 389 organisations (2014:403) received total donations of EUR 0.2 million (2014:EUR 0.3 million) in this way. The low interest rateclimate and low interest rates on savings accountsthat result from it discouraged some customers todonate part of the interest they receive.
Loans
The growth of the quality and size of the loan portfoliois an important indicator of the contribution TriodosBank makes towards a more sustainable economy. Allthe sectors it works in qualify as sustainable and thecompanies and projects it finances contribute todelivering Triodos Bank’s mission (as detailed below).
Outstanding loans per sector in 2015
To make sure that Triodos Bank only financessustainable enterprise, potential borrowers are firstassessed on the added value they create in theseareas. The commercial feasibility of a prospectiveloan is then assessed and a decision made aboutwhether it is a responsible banking option. Thecriteria or guidelines Triodos Bank uses to assesscompanies can be viewed on www.triodos.com.
Triodos Bank’s main focus remains on the existingsectors in which it has already developed consider-able expertise and where it considers more growth,diversification and innovation to be possible.
Environment (37%, 2014: 43%)
This sector consists of renewable energy projects suchas wind and solar power, biomass, hydro-electric, andenergy saving projects. It also includes organicagriculture, and projects across the entire agriculturalchain, from farms, processors and wholesale
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companies to natural food shops. Environmentaltechnology, such as recycling companies and natureconservation projects, is also represented.
Social (24%, 2014: 26%)
This sector includes loans to traditional businesses ornon-profit organisations and innovative enter-prisesand service providers with clear social objectives,such as social housing, loans to fair trade businesses,integration for people with disabilities or at risk ofsocial exclusion, and health care institutions.
Culture (14%, 2014: 15%)
This sector covers loans to organisations working ineducation, retreat centres, religious groups, culturalcentres and organisations, and artists.
Residential sustainable mortgages, municipalitiesand private loans (25%, 2014: 16%)
The remaining proportion of the loan book is primarilycomprised of residential sustainable mortgages, plussome limited short-term loans including overdrafts oncurrent accounts.
The lending sectors above describe the main sectorsTriodos Bank is involved in. Parts of these sectors arealso financed by both Triodos Bank itself and itsinvestment funds (see investments below).
The loan portfolio as a percentage of the total amountof funds entrusted increased to 72% in 2015 (2014:
68%). Triodos Bank’s goal is to lend between 65% and70% of its funds entrusted. This remains an importantchallenge for the bank. The increase in lending wasprimarily due to short term loans to municipalities.Without them the ratio decreased to 62% (2014: 63%).
The quality of the loan book remained satisfactoryoverall, particularly in the light of the declining qualityof lending in many European banks, and despite awider economic environment of limited or no growth insome countries and a difficult economic environment.This and a continuing focus on maintaining anddiversifying a high quality loan portfolio, led to adecline of the impairments for the loan portfolio to0.16% of the average loan book (2014: 0.28%). This islower than the Triodos Bank’s long-term internalbenchmark for impairments of 0.25%. Theseimpairments are taken in case potential lossesresulting from defaults by borrowers become a reality.
Growth of the loan portfolio amounted toEUR 949 million or 22%. Expected growth wasbetween 5% and 15%. An important part of thisgrowth is a substantial increase in larger loans toDutch, Belgian and German municipalities, primarilybecause of liquidity management.
These investment-type loans in the public sector areincluded in the loan portfolio in accordance withregulations related to financial reporting. Without thisthe loan portfolio would have grown by approximately13%, mainly because of the increase of the mortgageportfolio by 52%. The increase in business loans was
30,700Organic land on farms financed byTriodos Bank and Triodos InvestmentManagement produced enough food tofeed approximately 30,700 people in 2015.
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limited to 9%. The distribution of growth over the sectorshas been deliberate to achieve more diversification andto lower the risk profile of the portfolio.
Competition between banks in the lending market hasrevived after a period of restructuring and recapital-isation. Banks regard sustainability as an emergingmarket and have continued to make inroads into itcompeting aggressively to take advantage of availablelending opportunities.
Prospects
Triodos Bank’s balance sheet total is expected to growmore modestly. Growth of approximately 10% isexpected in 2016.
All branches will focus on continuing to deliver, ordevelop, a credible set of services. For example,preparations for the launch of a current account willcontinue in the UK in 2016. The number of customersis expected to grow in 2016 by between 10 and 15%across the Group.
We want to realise a loans to deposits ratio ofbetween 65 and 70%, excluding investment-typeloans in the public sector.
The loan portfolio and funds entrusted are expectedto increase by approximately 10% respectively.Triodos Bank’s ambitions are to focus primarily on thequality and diversification of its loan portfolio whilerealising modest growth. In that context we willconcentrate on loans that reflect Triodos Bank’sefforts to finance front-runners in their fields; theentrepreneurs developing the sustainable industriesof the future.
Triodos Investment Management
Investments take place through investment funds orinvestment institutions bearing the Triodos name andare managed by Triodos Investment Management,which consists of Triodos Investment Management BVand Triodos Investment & Advisory Services BV, bothwholly owned subsidiaries of Triodos Bank NV. TriodosInvestment & Advisory Services BV has beenincorporated, in July 2014, resulting from the
implementation of the Alternative Investment FundManagers Directive (AIFMD).
Triodos Investment funds only invest in sustainablethemes such as inclusive finance, sustainable trade,organic food and agriculture, energy and climate,sustainable real estate, arts and culture, or in listedcompanies with above average environmental, socialand governance (ESG) performance.
The funds publish separate annual reports andmost have their own Annual General Meeting ofShareholders.
Triodos Investment Management is responsible for18 funds, for both individual and institutionalinvestors, totalling EUR 3.1 billion assets undermanagement. In 2015 Triodos InvestmentManagement introduced a new investment fund:Triodos Multi Impact Fund. This ‘fund-of-funds’ meetsa strong demand from Dutch retail investors to maketheir money work in multiple sectors that are all key inthe transition to a fairer and more sustainable world.The total growth of the investment funds wasEUR 500 million, up 19% (2014: 6%) reflecting afavourable investment climate.
The continuing increase in total funds entrusted toTriodos Investment Management also reflectsinvestors’ appetite for sustainable and impactinvestments. Worldwide, investors are increasinglyopting for meaningful and measurable impact inaddition to financial results. This development is ofgreat value in the transition to a more sustainablesociety. Triodos Sustainable Funds (SICAV I), TriodosFair Share Fund and Triodos Microfinance Fund inparticular have benefited from this emerging changeand have experienced substantial growth, although ata more moderate level than in 2014, with an increaseof 26%, 17% and 32% respectively (2014: 53%, 26%and 40%).
Prospects
Triodos Investment Management is confident that itsfunds will continue to attract investors, building on over20 years experience in bringing together values, vision,and financial returns on investment. With an
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increasing demand across Europe from investors inimpact investment looking for an experienced, reliableand professional impact investment partner, it willbroaden its international distribution strategy byadding new markets to its distribution network. Tostrengthen its reputation as an innovative investmentmanager Triodos Investment Management willcontinue to seek development and growth, boththrough expansion within existing funds and throughthe creation of new values-based investmentsolutions, including further exploring the developmentof its SRI Funds. Overall, Triodos InvestmentManagement is well positioned for further growth.
Triodos Investment Management’s strategic focus willcontinue to be on third party distribution to retailinvestors (other banks and Triodos Bank) andprofessional investors that cater for impact investmentsolutions for individual investors, and will furtherdevelop its international distribution network andinstitutional investor base.
In the context of ambitions to further increase itsimpact and with challenging market circumstancesand increasing regulations, Triodos InvestmentManagement aims to grow its assets undermanagement to approximately EUR 3.6 billion in 2016.
Triodos Bank Private Banking
Private Banking offers a broad range of financial andnon-financial services to wealthier people,foundations, associations and religious institutions.Sustainable asset management is the core servicewithin Triodos Private Banking, and includes bothTriodos investment funds and private assetmanagement.
Private Banking’s focus is primarily on developingeffective dialogue with investors. Asset growth is asecondary objective. This dialogue sends a clearmessage to investees that a strong and energeticmovement is driving larger, publicly financed companiesto adopt sustainable policies. Private Banking increasedits funds under management by 12% toEUR 1,381 million slightly below a target of 15 to 20%mainly due to a lower growth in the foundation andcharity portfolio. EUR 461 million of these funds aremanaged by Triodos Private Banking and accounted foron the balance sheet of the Dutch branch.
Prospects
Triodos Private Banking expects interest in itssustainable investment offering in The Netherlandsand Belgium to continue to be substantial andexpects long term growth to be between 10 and 15%.
More details about the local branches, TriodosInvestment Management and Triodos Private Banking,can be found in Triodos Bank’s online annual report atwww.annual-report-triodos.com.
Risk and ComplianceRisk Management
Managing risk is a fundamental part of banking.Triodos Bank manages risk as part of a long-termstrategy of resilience.
Risk Management is embedded throughout theorganisation. While business managers are primarilyresponsible for delivering a resilient businessapproach, they are supported by risk managers, withlocal business knowledge, to identify, assess and
1,381 millionPrivate Banking increasedits funds under managementby 12% to EUR 1,381 million.
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manage risk. At a group level, a risk appetite processis implemented to align Triodos Bank’s risk profilewith the willingness to take risk in achieving itsbusiness objectives.
During this process each business unit performs astrategic risk assessment to identify and managepotential risks that could impede the realisation oftheir business objectives. The results of these assess-ments are consolidated and used as input for theExecutive Board’s own risk assessment, and todetermine Triodos Bank’s risk appetite. The results ofthese assessments are part of the business plan cycle.
The strategic risk assessment outcomes form thestarting point and foundation for determining the riskappetite, the assessment of the capital and liquidityrequirements in relation to the risk appetite andrecovery plan in case of deviation. In addition, thelocal risk sensitivities were reviewed to determinescenarios that were used to stress test Triodos Bank’ssolvency, liquidity and profitability during 2015. Theresults of these tests were satisfactory.
A fully integrated risk management report givesinsights into the Triodos Bank risk profile in relation tothe accepted risk appetite. The report is an importantmonitoring tool for Triodos Bank’s risk profile, givesinsights on specific risk themes, and provides anintegrated picture of risk at business unit level. Thisreport is produced quarterly and discussed with theSupervisory Board’s Audit and Risk Committee.
The monthly Asset and Liability Committee isresponsible for assessing and monitoring the risksassociated with market risk, interest rate risk,liquidity risk, and currency risk and capitalmanagement.
The credit risk function plays an important role inassessing the risk of new loans and monitoring thecredit risk of the entire loan portfolio.
The assessment of credit risk is as close as possibleto the client, and therefore primarily the responsibilityof local branches, who are responsible for dailyoperations. The central risk function sets norms,
approves large loans and monitors the credit risk ofTriodos Bank’s entire loan book.
The Risk Management section of Triodos Bank’s annualaccounts provides a description of the main risksrelated to the strategy of the company. It also includesa description of the design and effectiveness of theinternal risk management and control systems for themain risks during the financial year. No majordeficiencies in the internal risk management andcontrol systems were discovered in the financial year.The developments of the main risks within TriodosBank are described in the integrated risk managementreport and discussed on a regular basis in the Auditand Risk Committee of the Supervisory Board.
Basel III Capital and Liquidity Requirements
Regulations are demanding a more resilient bankingsector by strengthening the solvency of the banks andintroducing strict liquidity requirements, such asthose developed by the Basel Committee on BankingSupervision. Based on the latest availableinformation, Triodos Bank already complies with thecapital and liquidity requirements that will be fullyimplemented from 2019, known as Basel III.
Triodos Bank’s capital strategy is to be stronglycapitalised. This has become an even more importantstrategic objective as the regulation introduces newmeasures to strengthen the capital base of all thebanks as a consequence of the financial crisis.Triodos Bank aims for a regulatory solvency ratio of atleast at least 16%, well above its own internaleconomic capital adequacy models to guarantee ahealthy and safe risk profile. The quality of capital isimportant as well as the solvency rate. Almost 100%of Triodos Bank’s solvency comes from commonequity. Economic capital is calculated periodically andsupports Triodos Bank’s own view of capital adequacyfor the purpose of the yearly Internal CapitalAdequacy Assessment Process, which is reviewed bythe Dutch Central Bank.
In 2015, Triodos Bank successfully raised capital fromits customers of over EUR 39.6 million. This hashelped it to maintain a regulatory solvency ratio of
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19.0%, at the end of 2015, well above both externaland its own internal requirements.
Triodos Bank’s liquidity position remained very strongduring 2015. Its policy is to invest excess liquidities inhighly liquid assets and/ or inflow generating assetsin the country where it has branches. In TheNetherlands Triodos Bank has invested its liquiditiesmainly in (green) bonds of the Dutch government,agencies, and banks, cash loans to municipalities,deposits with commercial banks and the DutchCentral Bank. In Belgium most of its liquidity has beeninvested in (local) Belgian government bonds. In Spainthe liquidity surplus is invested in bonds of theKingdom of Spain, Spanish regions and agencies anddeposited with the Spanish Central Bank. In the UKthe excess liquidity is invested in UK governmentbonds and placed on deposits with commercialbanks. In Germany, the surplus liquidities are placedwith local governments and with commercial banks.
The Liquidity Coverage Ratio (LCR) and Net StableFunding Ratio (NSFR) are both well above theminimum limits of Basel III.
More detailed information about Triodos Bank’sapproach to risk is included in the Financial Accountssection of this report starting on page 114.
In Control statement
The Executive Board is responsible for designing,implementing and maintaining an adequate systemfor internal control over financial reporting. Financialreporting is the product of a structured processcarried out by various functions and branches underthe direction and supervision of the financialmanagement of Triodos Bank.
The Executive Board is responsible for the riskmanagement function and compliance function. Therisk management function works together withmanagement to develop and execute risk policies andprocedures involving identification, measurement,assessment, mitigation and monitoring of thefinancial and non-financial risks. The compliancefunction plays a key role in monitoring Triodos Bank’sadherence to external rules and regulation and
internal policies. The adequate functioning of the riskmanagement and compliance function as part of theinternal control system is frequently under discussionwith the Audit and Risk Committee.
Triodos Bank’s Internal Audit function providesindependent and objective assurance of Triodos Bank’scorporate governance, internal controls, complianceand risk management systems. The Executive Board,under the supervision of the Supervisory Board and itsAudit and Risk Committee, is responsible fordetermining the overall internal audit work and formonitoring the integrity of these systems.
The enterprise risk management framework is thebasis for an integrated in control statement process.The Executive Board indicates that this processshould lead to an internal statement providingpositive assurance in the coming years.
The Executive Board has no indication that the riskmanagement and control systems have notfunctioned adequately and effectively in 2015.
The risk management and control systems providereasonable, but not absolute, assurance regarding thereliability of financial reporting and the preparationand fair presentation of its financial statements.
Compliance and Integrity
Triodos Bank has internal policies, rules andprocedures to guarantee that management complieswith relevant laws and regulations regardingcustomers and business partners. In addition, thecompliance department independently monitors theextent to which Triodos Bank complies with its rulesand procedures. External aspects of the compliancedepartment primarily concern accepting newcustomers, monitoring financial transactions andpreventing money laundering. Internal aspectsprimarily concern checking private transactions by co-workers, preventing and, where necessary,transparently managing conflicts of interest andsafeguarding confidential information. In addition, itconcerns raising and maintaining awareness of, forexample, financial regulations, compliance proceduresand fraud and anti-corruption measures. Triodos Bank
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has a European compliance team led from the headoffice in Zeist. Compliance officers are appointed inevery branch. The Director of Risk and Compliancereports to the Executive Board and has an escalationline to the Chair of the Audit and Risk Committee, thatsupports the independence of the Risk ControlFunction as a countervailing power to the business.
There were no significant incidents in 2015concerning compliance and integrity. Triodos Bankwas not involved in material legal proceedings orsanctions associated with non-compliance withlegislation or regulations in terms of financialsupervision, corruption, advertisements, competition,data protection or product liability.
Sustainability Policy
Sustainability considerations are shared at all levelsof Triodos Bank and are an integral part of itsmanagement. Social and environmental aspects aretaken into account in all day-to-day businessdecisions. Therefore Triodos Bank does not have a
separate department that continuously focuses onsustainability or corporate social responsibility.
Triodos Bank employs specific criteria to ensure thesustainability of products and services. It employsboth positive criteria to ensure it is actively doing goodand negative criteria for exclusion, to ensure it doesn’tdo any harm. The negative criteria exclude loans andinvestments in sectors or activities that are damagingto society. The positive criteria identify leadingbusinesses and encourage their contributions to asustainable society. Twice a year, these criteria aretested and adjusted if necessary. Triodos Bank hasalso defined sustainability principles for its internalorganisation. These are included in its BusinessPrinciples. All sustainability criteria referred to can befound on www.triodos.com/businessprinciples.
Zeist, 25 February 2016
Triodos Bank Executive BoardPierre AebyJellie BangaPeter Blom, Chair
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BiographiesPierre Aeby (1956), CFO
Pierre Aeby has been statutory Member of theExecutive Board of Triodos Bank N.V. since 2000. He isalso a Member of the Board of Stichting TriodosHolding, Statutory Director of Triodos Ventures BV,Member of the Board of Stichting Hivos TriodosFonds, Member of the Board of Stichting TriodosSustainable Finance Foundation, Chair of the Boardof Stichting Triodos Foundation, Director of TriodosFonds Vzw, Chair of the Management Board of TriodosSICAV I and Triodos SICAV II, Member of the Board ofTriodos Invest CVBA, Chair of the Board of Enclude Ltdand Member of the Board of Vlaams Cultuurhuis DeBrakke Grond. He is of Belgian nationality and owns21 Triodos Bank depository receipts.
Jellie Banga (1974), COO
Jellie Banga has been statutory Member of theExecutive Board of Triodos Bank N.V. since September2014. She is Chief Operating Officer and was firstappointed to the Executive Board as a non-statutoryMember in 2013. Jellie Banga is a Member of theBoard of Stichting Triodos Sustainable FinanceFoundation and a Member of the Advisory Board ofStichting Lichter. She is of Dutch nationality and doesnot own any Triodos Bank depository receipts.
Peter Blom (1956), CEO
Peter Blom has been statutory Member of theExecutive Board of Triodos Bank N.V. since 1989 and isChair of this Board. He is also a Member of the Boardof Stichting Triodos Holding, Statutory Director ofTriodos Ventures BV, Member of the Board of StichtingHivos Triodos Fonds, Member of the Board ofStichting Triodos Sustainable Finance Foundation,Chair of the Board of Stichting Global Alliance forBanking on Values, Member of the Board of the DutchBanking Association, member of the Board ofStichting Sustainable Finance Lab, Member of theboard of Stichting Nationaal Restauratiefonds,Member of the Board Stichting NatuurCollege and aBoard member of Triodos Invest CVBA. He is of Dutchnationality and owns one Triodos Bank depositoryreceipt.
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Corporate Governance
Triodos Bank has a corporate governance structurethat reflects and protects its mission and meets allrelevant legal obligations. General information aboutTriodos Bank’s compliance with the Dutch CorporateGovernance Code and the Banking Code is providedon the following pages.
More details on Triodos Bank’s governance structureare available at www.triodos.com/governance.
Triodos Bank’s Internal GovernanceTriodos Bank is a European bank with branches in TheNetherlands (Zeist), Belgium (Brussels), the UnitedKingdom (Bristol), Spain (Madrid) and Germany(Frankfurt). It also has a representative office inFrance (Paris). The head office and statutory seat is inZeist, The Netherlands.
Foundation for the administration of Triodos Bankshares (SAAT)
Triodos Bank believes it is crucial that its mission andidentity is protected. For that reason, all TriodosBank’s shares are held in trust by SAAT, theFoundation for the Administration of Triodos BankShares. SAAT then issues depository receipts forTriodos Bank shares to the public and institutions.These depository receipts embody the economicaspects of the shares of Triodos Bank. SAAT exercisesthe voting rights attached to the Triodos Bank shares.The Board of SAAT’s voting decisions are guided byTriodos Bank’s object and mission, its businessinterests, and the interests of the depository receiptholders. Triodos Bank depository receipts are notlisted on any stock exchange. Instead, Triodos Bankmaintains its own platform for trading in depository
Number of statement of depository receipts per holder
Depository receipt holders Issued capital
Issued capital in millions of EUR 2015 2014 2015 2014
1 – 50 13,523 12,981 20.6 19.1
51 – 500 18,535 16,557 265.6 225.7
501 – 1,000 2,405 1,994 132.3 106.2
1,001 and more 1,272 1,059 362.0 352.6
Total 35,735 32,591 780.5 703.6
Number of depository receipts per country
Depository receipts × 1,000 Depository receipt holders
2015 2014 2015 2014
The Netherlands 5,607 5,328 19,199 17,019
Belgium 1,901 1,785 6,217 5,917
United Kingdom 245 245 2,014 1,982
Spain 1,842 1,613 7,925 7,508
Germany 92 44 380 165
Total 9,687 9,015 35,735 32,591
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Statement of institutions with a participating interest of 3% or more
as a percentage 2015 2014
Coöperatieve Centrale Raiffeisen-Boerenleenbank BA 5.6 5.8
Delta Lloyd Levensverzekering NV 3.9 4.1
Stichting Grafische Bedrijfspensioenfondsen 0.0 3.0
The above institutions are the largest of the total of 3 (2014: 5) institutions that have a participating interest of at least 1%.Their total participating interest is 10.5% (2014: 16.8%).
receipts. It determines the price of the depositoryreceipts, on a daily basis, using a fixed calculationmodel that calculates the net asset value (NAV) perdepository receipt.
Depository receipt holders
Depository receipt holders are entitled to vote at theGeneral Meeting of depository receipt holders. Eachdepository receipt holder is limited to a maximum of1,000 votes. The Annual General Meeting ofdepository receipt holders appoints the members ofthe Board of SAAT, based on the Board’srecommendations. These recommendations must beapproved by Triodos Bank’s Executive Board andSupervisory Board. No depository receipt holder mayhold more than 10% of all issued depository receipts.
Triodos Bank Supervisory Board
Triodos Bank has a Supervisory Board, whichmonitors Triodos Bank’s business operations andadvises and assists the Executive Board, to benefit itsbusiness interests. Members of the SupervisoryBoard are appointed and reappointed by the GeneralMeeting of Triodos Bank, based on recommendationsfrom the Supervisory Board.
Triodos Bank’s Executive Board
The members of the Executive Board have a sharedoverall responsibility for the management of TriodosBank. The Executive Board members have aleadership role in strategic development, alignmentand ensuring the delivery of the organisation’s goals.They are accountable to the Supervisory Board whoappoints them.
Stichting Triodos Holding
Stichting Triodos Holding is legally separate, butorganisationally related, to Triodos Bank. It is a 100%shareholder of Triodos Ventures B.V., an investmentfund for higher risk and strategically importantactivities that reflect Triodos Bank’s mission andactivities. The Board of Management of StichtingTriodos Holding and the Board of Management ofTriodos Ventures BV are made up of two members ofthe Executive Board of Triodos Bank. Stichting TriodosHolding has a Supervisory Board appointed on therecommendation of the Board of SAAT.
Stichting Triodos Foundation
Stichting Triodos Foundation is a sister institution ofTriodos Bank that is legally separate, butorganisationally related to it. Currently, the Board ofManagement of Stichting Triodos Foundation is madeup of co-workers and one member of the ExecutiveBoard of Triodos Bank. It makes donations toinitiatives that help Triodos Bank to deliver itssustainable goals. Similar foundations have been setup in Belgium, the UK and Spain.
Dutch Corporate Governance CodeThe Dutch Corporate Governance Code (‘the Code’)only applies to companies whose shares are listed ona regulated market. Even though Triodos Bank’sdepository receipts are not listed on any regulatedmarket it chooses to endorse and comply with theprinciples and best practices of the Code. The fullcomply-or-explain statement as required under theCode can be accessed at www.triodos.com/governance.
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Although Triodos Bank generally complies with theprinciples and best practices of the Code, it has optedto consciously differ from it in several specificinstances.
The first deviation relates to voting rights on sharesand appointments. To secure the continuity of TriodosBank’s mission and objectives, depository receiptholders cannot exercise voting rights on theunderlying shares. Instead these rights are exercisedby SAAT. For the same reason, depository receiptholders cannot make recommendations forappointments of members of the Board of SAAT andformer Executive Board or Supervisory Boardmembers of the bank can be appointed as membersof the Board of SAAT.
The second instance relates to the term of office ofExecutive Board members. This term is not limited toa period of four years because Triodos Bank feels thatthis would not serve the long term development of theorganisation.
Triodos Bank also differs from the best practice in theCode that states that a person may be appointed to theSupervisory Board for a maximum of three, four-yearterms. Its articles of association allow the GeneralMeeting to re-appoint a member of the SupervisoryBoard, in exceptional circumstances, after his or hermaximum number of terms has been completed. Thiscreates extra time and space for the Supervisory Boardto fill vacancies with high quality people.
The fourth instance concerns the fact that, forpractical reasons, Triodos Bank has adopted amodified regime for conflicts of interest relating tocases in which it intends to enter into a transactionwith a legal entity in which an Executive Boardmember holds a management or supervisory position.If such a conflict of interest concerns a legal entityoutside the Triodos Bank Group, and is of materialimportance to it, the adapted regime provides forchecks and balances (e.g. through the involvement ofthe Supervisory Board’s Audit and Risk Committee)and ensures adequate transparency. If such a conflictof interest regards a legal entity within the TriodosBank Group no rules will apply. This is in accordancewith the latest developments in regulation and case
law. To other (personal) conflicts of interest ofExecutive Board members (as defined in best practiceII.3.2 sub i) and ii) of the Code) the provisions of theCode are applicable.
The fifth instance relates to the fact that theSupervisory Board of Triodos Bank does not haveseparate nomination and remuneration committees.Instead, it operates an integrated Nomination andCompensation Committee. This is done for practicalreasons, given Triodos Bank’s relatively modest size.
Triodos Bank also differs from the Code’s best practicewhen submitting all proposals to the General Meetingfor material amendments to the Articles of Associationas separate agenda items. For practical reasonsTriodos Bank wants to retain the possibility, at thediscretion of the Executive Board and the SupervisoryBoard, to submit a proposal for multiple amendmentsto the Articles of Association as one single agenda itemwhen there is a strong degree of interrelatednessbetween these proposed amendments.
Finally, as it does not have any share plans or optionschemes in place, several Code provisions regardingexecutive remuneration do not apply to Triodos Bank.The total costs for executive remuneration, whichprimarily consist of wages and pension elements, arepublished in this annual report.
Dutch Banking CodeThe Dutch Banking Code (‘the Banking Code’) cameinto force as of 1 January 2010 and has been revisedin 2014. The Banking Code is part of a package of newdevelopments for the banking industry called ‘FutureOriented Banking’ introduced by the Dutch Bankers’Association (NVB). The package includes, besides therevised Banking Code, a Social Charter and rules ofconduct associated with the Dutch bankers’ oath.
The revised Banking Code came into effect on1 January 2015. It consists of a number ofrecommendations and principles aimed at ensuringthe very best performance by banks. Its primary focusis on governance and the banks’ culture. It puts theinterests of the customer at the heart of a bank’s
41
activity, which ties in fully with Triodos Bank’s visionand Business Principles.
The customer is a key stakeholder in all Triodos Bank’sactivities and its mission. Triodos Bank complies withthe principles of the Banking Code, with the exceptionof one principle: Triodos Bank chooses not to havevariable remuneration based on predeterminedfinancial targets or achievements, as these canenhance a culture of taking inappropriate risks.Triodos Bank monitors, identifies and addresses anyoccasions when it does not comply with the BankingCode on an ongoing basis. More information onTriodos Bank’s implementation of the Banking Code,including the full comply-or-explain statement asrequired under the Banking Code, is available atwww.triodos.com/governance.
Bankers’ Oath and rules of conductThe Dutch Bankers’ Oath was introduced on 1 April2015. All co-workers of Dutch banks are required to
take this oath. A co-worker hereby declares that he orshe will comply with the rules of conduct set by theNVB. The rules of conduct have been drawn up in linewith Triodos Bank’s own, existing Business Principles.By taking the oath Triodos Bank makes more explicitwhat the bank already does.
Corporate Governance StatementThe Executive Board of Triodos Bank has drafted aCorporate Governance Code Statement in accordancewith the Dutch Decree implementing furtheraccounting standards for the content of annualreports dated 23 December 2004 (as amended on20 March 2009). This statement forms part of the2015 Annual Report and is valid as of its date. Thestatement can be found in the online annual reportand at www.triodos.com/statements. The statementcan be found in the online annual report and atwww.triodos.com/statements.
42
Supervisory Board Report
The Supervisory Board supervises and reviews theactivities and the decisions of the Executive Board, thedevelopment of Triodos Bank’s operations and therealisation of its mission, and contributes to strategydevelopment. In addition, it assists the Executive Boardby providing advice and guidance. The review is basedon reports on business, finance and other aspects, andon presentations, conversations and visits. These arescheduled so that all substantive areas of Triodos Bankare covered within a two-year time frame.
Triodos Bank in a changing bankinglandscapeThe Supervisory Board is pleased that Triodos Bankhas continued to extend its impact, deliver a fair profitand be both relevant and a reference point for stake-holders with an interest in values-based banking.
Social, technological, regulatory and marketdevelopments affected and changed the bankinglandscape in 2015. These changes influence bankingbusiness models including Triodos Bank’s and havedirectly impacted on its plans for the next three years.The Supervisory Board welcomes its response, andparticularly its plans for the coming three years. Theorganisation is an effective, integrated values basedbank that is well aware of its strengths and itsopportunities in the market. During 2015 compre-hensive discussions across the bank led to a strategicfocus and a concrete solid business plan for the nextthree years to generate more impact, maintain aresilient financial foundation and deliver a fair return.
The Supervisory Board supports the Executive Board,and Triodos Bank’s co-workers, in their continuingefforts to make a deep-seated and positive differenceto the development of people’s quality of life.
Activities of the Supervisory BoardThe Triodos Essence and strategy development
In 2015, the Supervisory Board contributed to thedevelopment of the Triodos 2025 strategy process andits translation into the 2016-2018 business plan. TheSupervisory Board sees that the issues that areimportant to the bank’s stakeholders are reflected in
Triodos Bank’s strategic approach. The SupervisoryBoard specifically discussed the Essence of TriodosBank to ensure full alignment on the values and therole they play in the business.
Impact, Risk, Return
2015 was marked by managed growth, increasedimpact and robust financial performance. However,the ratio of funds entrusted to loans continued to bean issue during the year. The Supervisory Boardconsiders this to present a challenge both from afinancial and a mission perspective and welcomed thesteps the bank is taking to improve the balance.
Because of changing capital requirements, theSupervisory Board monitors the financial health ofTriodos Bank, its financial ratios, its capital positionand the impact of stricter regulatory capitalrequirements. In 2015, an internal project to make animportant step-up in governance and riskmanagement was formally closed. Triodos Bank is amidsize bank that is able to comply with the newregulations and well-established for further growth.
Other topics
During 2015, topics discussed at the SupervisoryBoard’s meetings and contacts with the ExecutiveBoard included:• Strategy: the Triodos 2025 process and the businessplan 2016-2018, developments in different countriesand at Triodos Investment Management, the mainstrategic risks of the business, and a quarterly analysisof Triodos Bank’s overall performance and health.• Finance: Triodos Bank’s financial and economicdevelopments and their possible impact. Morespecifically, the bank’s capital position, the financialresults 2014, the management letter, the 2014 annualreport and the Executive Board report and the half-year report.• Risk and Audit: the design and effectiveness of theinternal risk management framework and controlsystems, the ‘risk appetite’ and the actual risk profile,the audit findings, the auditor’s reports, quarterlyreports and loan reports, the readiness for, andimplementation of, new capital and other regulatoryrequirements.
43
• Human resource management: senior managementdevelopment and talent management, organisationalchanges and the company culture, the annual revisionof the international remuneration and nominationpolicy.• Internal organisation: the roles and responsibilities ofthe Supervisory Board, the Board of SAAT and theExecutive Board in relation to each other, and anupdate of internal rules for the Supervisory Board(including a revised procedure on other positions ofSupervisory Board members).• Business Units: Meetings were held with themanagement of local branches and Triodos InvestmentManagement by individual Supervisory Boardmembers, together with a representative of the Boardof SAAT and the Executive Board. Presentations weregiven by local branch management and TriodosInvestment Management. The Supervisory Boardclosely followed developments in the branches inSpain, Belgium and the United Kingdom, particularlydue to changes in senior management, and Germanybecause the branch has not yet reached break-even.The Supervisory Board was not only timely informedabout changes in senior management but also fullyendorsed the decisions of the Executive Board.• Contacts with the Dutch Central Bank: The Chair, theVice Chair and the Chair of the Audit & Risk Committeemet twice with the Dutch Central Bank. More frequentcontact with the regulator is the result of TriodosBank’s growing balance sheet and scope of activities.• Contact with the Board of SAAT: A Supervisory Boarddelegation had an informal meeting with a delegationfrom the Board of SAAT in advance of the GeneralMeeting.
Internal OrganisationComposition of the Supervisory Board
Triodos Bank’s articles of association determine that theSupervisory Board consists of three or more members. Atpresent it has six. At Triodos Bank’s General Meeting inMay 2015, Margot Scheltema and Marcos Eguigurenretired from the Supervisory Board. Udo Philipp wasappointed as a Supervisory Board member for hissupervisory experience and familiarity with the Europeanfinancial markets, and Germany in particular. Mathieu
van den Hoogenband was also reappointed for a period oftwo years. The composition of the Supervisory Board wascarefully considered during this process in the light of therequired competences.
Diversity
The Supervisory Board aims to be diverse, with anadequate balance of nationalities, age, experience,background and gender. In particular, its objective isfor no more than 70% of its seats to be held by eithergender. From May 2015, there were five male and onefemale Supervisory Board members. With respect tofuture appointments and reappointments, theSupervisory Board will strive to meet the gendertarget set by Dutch law, in line with its diversity policy,while safeguarding the required continuity of thecollective tasks and responsibilities of theSupervisory Board.
Committees of the Supervisory BoardThe Supervisory Board has two committees as set outin the Corporate Governance chapter: the Audit andRisk Committee, and the Nomination andCompensation Committee. Both committees metseparately throughout the year. Their mainconsiderations and conclusions were shared with theSupervisory Board, where formal decision-makingtakes place.
The composition of the committees is as follows:
Audit and Risk Committee
• Carla van der Weerdt (Chair)• Ernst-Jan Boers• David Carrington (from 22 May 2015)
Nomination and Compensation Committee
• Mathieu van den Hoogenband (Chair)• Aart Jan de Geus• Udo Philipp (from 22 May 2015)
For more information on the Supervisory Boardmembers, see the biographies.
44
Activities of the Audit and Risk Committee
The Audit and Risk Committee (ARC) met five timesduring 2015. Triodos Bank’s Chief Financial Officer,the Head of Internal Audit, the Director Risk and theexternal auditors were present at all meetings. Threeof the five ARC meetings concentrated on risk, withaudit and other matters included as less prominentagenda items. Financial results and audit matterswere the main topics in the other two meetings. Inaddition, one meeting was held with the externalauditor, without the Executive Board being present.The Chair of the ARC also met separately with theexternal auditor from time to time.
Carla van der Weerdt has been a member of the ARCfor 5 years and was appointed as Chair of the ARC inMay, to succeed Margot Scheltema, because of herextensive experience with Triodos Bank and bankingmore broadly.
David Carrington joined the ARC in May, for hisexperience and the role he played in discussionsabout the oversight of the risk management of TriodosBank, and to ensure a balanced distribution ofcompetences across the committees. With hisappointment, the Chair and Vice Chair of theSupervisory Board are divided over both committees.In its regular review of the (semi-) annual results, theARC satisfied itself that the numbers had been agreedby the external auditor without any material changes,no unforeseen matters were brought to its attentionand all accounting decisions and assumptions hadbeen adequately supported and agreed. The financialresults and the outlook of the individual brancheswere discussed in the ARC before discussed in the fullSupervisory Board.
The internal audit function continued to develop itsposition as a third line of defence in Triodos Bank. TheExecutive Board now tables outstanding audit issueson its branch and business visits as standardpractice. Further attention to audit follow-up is stillrequired. The efficiency and the added value of theaudit department, as measured by a number of KPIs,has been improved and will continue to be in 2016.The ARC will monitor this closely.
As part of its regular agenda, the ARC reviewed anddiscussed the yearly update of the risk appetiteframework and statement, as well as the annualICAAP and ILAAP reports to the Dutch Central Bank(DNB).
A number of risk management improvements havebeen put in place under the leadership of the DirectorRisk. The regular review of Triodos Bank’sconcentration risk has led to further diversificationmeasures, which will reduce the concentration in thesolar sector. A new risk rating methodology has beenimplemented successfully. This will bring a number ofother benefits including opportunities for dynamiccredit pricing, in the future. Both credit risk andinterest rate risk have been analysed thoroughly andnew approaches have been presented to anddiscussed in the ARC and then to the DNB. The ARCwelcomes the creation of these tools and relatedpolicies, which form part of the enhanced riskmanagement framework which was put in placeduring the year.
Finally, the ARC was closely involved with the selectionprocess for a new external auditor starting with the2016 financial year. A carefully managed tenderprocess has been carried out and the proposal hasbeen approved in the General Meeting in May 2015.
Activities of the Nomination and CompensationCommittee
The Nomination and Compensation Committee (NCC)met six times formally. The members of the NCC havesenior management experience and knowledge of –and experience with – performance management andremuneration in general. Additionally they seek advicefrom independent, external experts in case of specificissues. Udo Philipp joined the NCC in May as a newmember.
One of the NCC’s primary roles is to advise theSupervisory Board about the remuneration andnomination policy of Triodos Bank in general and toset the remuneration packages of the members of theExecutive Board. It also advises the Supervisory Boardon the appropriateness of the general conditions ofthe remuneration packages of Managing Directors
45
reporting directly to the Executive Board. TriodosBank´s international remuneration and nominationpolicy is in line with European and Dutch regulationregarding remuneration of financial institutions. Formore information on the international remunerationand nomination policy please refer to page 84 of theannual accounts.
The nomination issues in 2015 included thecomposition of the Supervisory Board and thenomination for appointment of a Board of SAATmember. The Chair of the NCC together with theSupervisory Board Chair reviewed the performance ofthe members of the Executive Board in personalinterviews, setting priorities for 2016. The NCC wasalso involved in a management exit interview.
The NCC organised a two day session as part of apermanent education programme for the SupervisoryBoard and the Executive Board. In 2015, theprogramme focused on board dynamics, Europeanregulation relating to among others banking, financialproducts and corporate governance, and TriodosBank’s business model.
Supervisory Board Competence MatrixThe matrix below lists the key competences of theindividual members of the Supervisory Board, whichare relevant to their supervisory position. To qualify asa member of the Supervisory Board, each individual isrequired to have at least the following threeattributes:• an affinity with the mission and values of TriodosBank,• senior management experience, and• international experience.
All Supervisory Board members meet these criteria.
The table below lists further competences in the keyareas described in the Supervisory Board’s profile. Ithighlights areas in which Supervisory Board membershave substantial expertise and helps to assesswhether the Supervisory Board has the appropriateskills to perform its duties. The matrix is based onrequirements outlined in the collective profile of theSupervisory Board, which is regularly updated.
Key areas of expertise
Nam
e (n
atio
nalit
y)
Year
ofb
irth
Gen
der
Sus
tain
abili
ty a
ndot
her
expe
rtis
epa
rtic
ular
ly re
leva
ntto
Tri
odos
Ban
king
and
Fina
nce
Aud
it a
nd R
isk
Gov
erna
nce
and
Man
agem
ent
HR
and
Org
anis
atio
nal
Dev
elop
men
t
Aart Jan de Geus (Dutch)(chair) 1955 M • • •
David Carrington (British) 1946 M • • •
Ernst-Jan Boers (Dutch) 1966 M • • •
Mathieu van denHoogenband (Dutch) 1944 M • • •
Udo Philipp (German) 1964 M • • •
Carla van der Weerdt(Dutch) 1964 F • • •
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Meetings of the Supervisory BoardAll meetings of the Supervisory Board are held jointlywith the Executive Board. Every meeting in 2015 (six intotal) was preceded by an internal meeting in whichonly Supervisory Board members participated. Oneinternal meeting was devoted to a discussion aboutthe internal evaluation report as well as an appraisalof the members of the Executive Board.
Since 2012, at least one Supervisory Board meetingper year has been held in a country with a branchoffice. In 2015 this meeting took place in Triodos
Bank’s Netherlands branch. A series of presentationsand discussions were held with senior management,developing and deepening insights into Triodos Bank’sDutch activities.
The Chair of the Supervisory Board and the Chair ofthe Executive Board maintained frequent contactsthroughout the year; the Chair of the Audit and RiskCommittee was in regular and close contact with theChief Financial Officer, as was the Chair of theNomination and Compensation Committee with theChief Executive Officer.
Attendance of the Supervisory Board members in 2015
Supervisory Board members in 2015Supervisory Board
meeting (6)
Audit and RiskCommitteemeeting (5)
Nomination andCompensation
Committeemeeting (6)
Aart Jan de Geus 6/6 6/6
David Carrington*** 6/6 3/3 3/3
Ernst-Jan Boers 6/6 5/5
Marcos Eguiguren Huerta* 3/3 2/2
Mathieu van den Hoogenband 6/6 6/6
Udo Philipp** 2/3 2/3
Margot Scheltema* 3/3 2/2
Carla van der Weerdt 6/6 4/5
* Margot Scheltema and Marcos Eguiguren Huerta retired on 22 May 2015.** as from 22 May 2015*** On 22 May, David Carrington stepped down from the Nomination and Compensation Committee to become a member
of the Audit and Risk Committee.
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Independence and Self-evaluationIndependence
The composition of the Board was such that memberswere able to act critically and independently of oneanother, the Executive Board and any particularinterest. The Supervisory Board complies with theindependence criteria of the Dutch CorporateGovernance Code. Aart Jan de Geus deviates from oneof the independence criteria (article III.2.2) of theDutch Corporate Governance Code because a familymember is a co-worker.
Conflicts of interest
In accordance with the requirements of the DutchCorporate Governance Code, the Supervisory Boardhas internal rules in place that govern any actual orpotential conflicts of interest of Board members. Noconflicts of interest occurred during 2015.
Education
As part of the Supervisory Board’s permanenteducation programme, it organises annual meetingswith external experts, with a view to keeping up-to-date with developments in society and the sectorsthat have an impact on Triodos Bank’s operations.Please see the report of the Nomination andCompensation Committee for more details.
Self-evaluation
The results of the 2014 self-evaluation werediscussed by the Supervisory Board, andrecommendations have been implemented as aresult. The Supervisory Board’s annual self-evaluationof the Supervisory Board as a whole, its individualmembers and its committees took place in the lastquarter of 2015 by two external facilitators. Theyfacilitated a session with the Supervisory Board andthe Executive Board on board dynamics, followed byinterviews with each Supervisory Board member. The
results of the evaluation are being discussed by theSupervisory Board in February 2016.
The Executive Board members shared their personalkey priorities for 2016 with the Chairs of theSupervisory Board and the Nomination andCompensation Committee. This is being evaluated bythe Supervisory Board early 2016.
ConclusionThe Supervisory Board is of the opinion that theAnnual Accounts and the Executive Board Reportprovide a true and fair view of Triodos Bank’s position.The Supervisory Board proposes that theshareholders adopt the Annual Accounts of 2015 anddischarge the members of the Executive Board fortheir management of Triodos Bank during 2015 andthe members of the Supervisory Board for theirsupervision.
The Supervisory Board endorses the ExecutiveBoard’s dividend proposal, of EUR 1.95 (per depositoryreceipt).
The Supervisory Board would like to thank all TriodosBank’s stakeholders for their trust in Triodos Bank andthe Executive Board, and all the organisation’s co-workers for their efforts. The Supervisory Board isconfident that Triodos Bank will be able to meet thechallenges in 2016 and will continue to act as areference point for the banking industry.
Zeist, 25 February 2016
Supervisory Board,Aart Jan de Geus, ChairDavid Carrington, Vice-ChairErnst Jan BoersMathieu van den HoogenbandUdo PhilippCarla van der Weerdt
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BiographiesAart Jan de Geus (1955), Chair
Aart Jan de Geus is Chair of the bank’s SupervisoryBoard and a Member of Triodos Bank's Nominationand Compensation Committee. He is Chair and CEO ofthe Bertelsmann Stiftung, a German think-tank.Before, he was Deputy Secretary-General at theOrganisation for Economic Cooperation andDevelopment (OECD) and Minister of Social Affairsand Employment in the Dutch Government(2002-2007). He was also a partner at Boer & CroonStrategy & Management Group and worked for theIndustriebond CNV and Vakcentrale CNV. Aart Jan deGeus was first appointed in 2014 and his present termexpires in 2018. He is of Dutch nationality and doesnot own any Triodos Bank depository receipts.
Ernst-Jan Boers (1966)
Ernst-Jan Boers is a Member of Triodos Bank’s Auditand Risk Committee. He was Chief Executive Officer atSNS Retail Bank until March 2014 where hepreviously also held the position of Chief FinancialRisk Officer. He worked at ABN AMRO HypothekenGroep B.V. until March 2007 including a role as ChiefFinancial Officer. Prior to that he worked at ReaalGroep N.V. as the head of Internal Audit and as aController. He is Board Member of Stichting NationaalEnergiebespaarfonds, a financial Member of theBoard of Coöperatie Medische Staf Gelre U.A. and aMember of the Supervisory Board of Coöperatie UnivéU.A.. Ernst-Jan Boers was first appointed in 2014 andhis present term expires in 2018. He is of Dutchnationality and does not own any Triodos Bankdepository receipts.
David Carrington (1946)
David Carrington is Vice-Chair of Triodos Bank’sSupervisory Board and a Member of Triodos Bank'sAudit and Risk committee. He has been anindependent consultant since 2001, specialising inthe development of philanthropy and social financeand in the governance of charities and socialenterprises. He draws on 25 years’ experience ofsenior management positions in charities – the last13 as Chief Executive – and as a Board Member with awide range of organisations in the UK. He is a non-executive Director of Big Society Capital, Chair of theProgramme Board of Inspiring Impact, a Member ofthe Advisory Group to the Stepping Stones Fund ofCity Bridge Trust and a Member of the Advisory Boardof the US Centre for Effective Philanthropy. He is adirector of the SOFII Foundation and GULAN. DavidCarrington was first appointed in 2009 and hispresent term expires in 2017. He is of Britishnationality and does not own any depository receipts.
Mathieu van den Hoogenband (1944)
Mathieu van den Hoogenband is Chair of TriodosBank's Nomination and Compensation Committee. Heis the former President of the Executive Board of theWeleda Group AG in Arlesheim, Switzerland. He is aMember of the Shareholders Council of Rhea HoldingBV (Eosta BV), Chair of the Supervisory Board ofStichting Widar 1st line Health Organisation andMember of the Advisory Council of theAntroposophical Medical Faculty of the privateUniversity Witten/Herdecke. Mathieu van denHoogenband teaches Leadership and Ethics inBusiness, Life Stages, and International MarketingManagement at the SRH Business School Berlin andAlanus Hochschule in Bonn-Alfter. Mathieu van denHoogenband was first appointed in 2007 and hispresent term expires in 2017. He is of Dutchnationality and owns 978 Triodos Bank depositoryreceipts.
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Udo Phillip (1964)
Udo Philipp is a Member of Triodos Bank’s Nominationand Compensation Committee. He is an advisor toSven Giegold, Member of the European Parliament inBrussels, and Dr. Gerhard Schick, Member of theBundestag in Berlin (both German Green Party). Hewas Managing Director and Founding Partner of theGerman subsidiary of EQT Partners based in Munichand held various senior positions at EQT. Prior to thisUdo Philipp was CFO of Bertelsmann ProfessionalInformation, Munich and CEO of its medicalpublishing division, Private Secretary to the FederalMinister of Economics and consultant. He started hiscareer in corporate banking with Dresdner Bank. UdoPhilipp was first appointed in 2015 and his presentterm expires in 2019. He is of German nationality anddoes not own any Triodos Bank depository receipts.
Carla van der Weerdt (1964)
Carla van der Weerdt is Chair of Triodos Bank's Auditand Risk committee. She is the owner and Director ofAccent Organisatie Advies B.V. She had a bankingcareer for fifteen years in ABN AMRO Bank NV,amongst others as the CFO/COO of Global TransactionBanking, as the Global Head of Operational RiskManagement and as the Global Head of RiskManagement & Compliance in Asset Management.Carla van der Weerdt is a Member of the SupervisoryBoard and Chair of the Audit Committee of BinckBankN.V. and a member of the Supervisory Board of DSWZorgverzekeraar U.A. Carla van der Weerdt was firstappointed in 2010 and her present term expires in2018. She is of Dutch nationality and does not ownany Triodos Bank depository receipts.
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Consolidated Balance Sheet as at 31 December 2015
Consolidated Profit and Loss Account for 2015
Consolidated Statement of Comprehensive Income for 2015
Consolidated Statement of Changes in the Equity for 2015
Consolidated Cashflow Statement for 2015
Notes to the Consolidated Financial Statements
Segment Reporting
Capital Instruments Main Features
Solvency
Leverage Ratio
Risk Management
Company Balance Sheet as at 31 December 2015
Company Profit and Loss Account for 2015
Company Statement of Changes in the Equity for 2015
Notes to the Company’s Financial Statements
Other Information
Combined independent auditor’s and assurance report
52
53
54
56
58
59
92
104
108
112
114
160
161
162
164
171
172
Annual Accounts 2015Triodos Bank NV
51
Consolidated Balance Sheetas at 31 December 2015
Before appropriation of profitin thousands of EUR Reference* 31.12.2015 31.12.2014
AssetsCash 1 285,819 175,225
Government paper 2 213,233 208,782
Banks 3 545,152 575,743
Loans 4 5,215,692 4,266,324
Interest-bearing securities 5 1,689,968 1,710,625
Shares 6 65 4
Participating interests 7 13,803 8,720
Intangible fixed assets 8 18,589 13,364
Property and equipment 9 58,392 39,821
Other assets 10 18,154 13,215
Prepayments and accrued income 11 152,284 140,581
Total assets 8,211,151 7,152,404
LiabilitiesBanks 12 39,798 54,627
Funds entrusted 13 7,282,564 6,288,828
Other liabilities 14 20,744 19,208
Accruals and deferred income 15 78,840 79,489
Provisions 16 3,438 1,377
Subordinated liabilities 17 5,250 5,250
Equity 18 780,517 703,625
Total equity and liabilities 8,211,151 7,152,404
Contingent liabilities 19 63,060 62,260
Irrevocable facilities 20 717,672 593,771
780,732 656,031
* References relate to the notes to the financial statements starting on page 59. These form an integral part of theconsolidated annual accounts.
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Consolidated Profit andLoss Account for 2015
in thousands of EUR Reference* 2015 2014
IncomeInterest income 21 182,752 173,654
Interest expense 22 –39,855 –47,404
Interest 142,897 126,250
Income from other participations 23 101 109
Investment income 101 109
Commission income 24 71,071 65,025
Commission expense 25 –3,396 –2,841
Commission 67,675 62,184
Result on financial transactions 26 774 551
Other income 27 142 497
Other income 916 1,048
Total income 211,589 189,591
ExpensesCo-worker and other administrative expenses 28 142,387 131,191
Depreciation, amortisation and value adjustments oftangible and intangible fixed assets 29 7,833 7,162
Operating expenses 150,220 138,353
Impairments loan portfolio 30 7,579 11,093
Value adjustments to participating interests –210 –181
Total expenses 157,589 149,265
Operating result before taxation 54,000 40,326
Taxation on operating result 31 –13,273 –10,201
Net profit 40,727 30,125
Amounts in EUR
Net profit per share 4.40 3.41
Dividend per share 1.95 1.95
53
Consolidated Statementof Comprehensive Income for 2015
in thousands of EUR 2015 2014
Net result 40,727 30,125
Revaluation of property, equipment andparticipating interest after taxation 104 200
Exchange rate results from businessoperations abroad after taxation 563 590
Total amount recognised directly in equity 667 790
Total comprehensive income 41,394 30,915
54
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55
Consolidated Statement of Changesin the Equity for 2015
in thousands of EURShare
capitalShare
PremiumRevaluation
reserveStatutory
reserveOther
reserveRetainedearnings
Totalequity
Equity as at 1 January 2014 427,452 118,162 180 5,116 77,439 25,683 654,032
Increase of share capital 14,950 8,079 23,029
Stock dividend 8,330 –8,330 –
Revaluation of property, equipment and participation interest after taxation 200 200
Realisation of revaluation 10 –10 –
Exchange rate results from business operations abroad after taxation 590 590
Profit appropriation for previous financial year, addition to the other reserves 8,667 –8,667 –
Profit appropriation for previous financial year, dividend –17,016 –17,016
Dividend not distributed in cash 12,662 12,662
Reverted dividend – –
Transfer to statutory reserve for development costs –196 196 –
Purchasing or sale of own depository receipts 3 3
Result for financial year 30,125 30,125
Equity as at 31 December 2014 450,732 117,911 390 5,510 98,957 30,125 703,625
Increase of share capital 24,858 14,763 39,621
Stock dividend 8,739 –8,739 –
Revaluation of property, equipment and participation interest after taxation 104 104
Realisation of revaluation 9 –9 –
Exchange rate results from business operations abroad after taxation 563 563
Profit appropriation for previous financial year, addition to the other reserves 12,375 –12,375 –
Profit appropriation for previous financial year, dividend –17,750 –17,750
Dividend not distributed in cash 13,633 13,633
Reverted dividend – –
Transfer to statutory reserve for development costs 5,213 –5,213 –
Purchasing or sale of own depository receipts –6 –6
Result for financial year 40,727 40,727
Equity as at 31 December 2015 484,329 123,935 503 11,286 119,737 40,727 780,517
56
in thousands of EURShare
capitalShare
PremiumRevaluation
reserveStatutory
reserveOther
reserveRetainedearnings
Totalequity
Equity as at 1 January 2014 427,452 118,162 180 5,116 77,439 25,683 654,032
Increase of share capital 14,950 8,079 23,029
Stock dividend 8,330 –8,330 –
Revaluation of property, equipment and participation interest after taxation 200 200
Realisation of revaluation 10 –10 –
Exchange rate results from business operations abroad after taxation 590 590
Profit appropriation for previous financial year, addition to the other reserves 8,667 –8,667 –
Profit appropriation for previous financial year, dividend –17,016 –17,016
Dividend not distributed in cash 12,662 12,662
Reverted dividend – –
Transfer to statutory reserve for development costs –196 196 –
Purchasing or sale of own depository receipts 3 3
Result for financial year 30,125 30,125
Equity as at 31 December 2014 450,732 117,911 390 5,510 98,957 30,125 703,625
Increase of share capital 24,858 14,763 39,621
Stock dividend 8,739 –8,739 –
Revaluation of property, equipment and participation interest after taxation 104 104
Realisation of revaluation 9 –9 –
Exchange rate results from business operations abroad after taxation 563 563
Profit appropriation for previous financial year, addition to the other reserves 12,375 –12,375 –
Profit appropriation for previous financial year, dividend –17,750 –17,750
Dividend not distributed in cash 13,633 13,633
Reverted dividend – –
Transfer to statutory reserve for development costs 5,213 –5,213 –
Purchasing or sale of own depository receipts –6 –6
Result for financial year 40,727 40,727
Equity as at 31 December 2015 484,329 123,935 503 11,286 119,737 40,727 780,517
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Consolidated Cashflow Statement for 2015
in thousands of EUR 2015 2014
Cashflow from operating activitiesNet profit 40,727 30,125Adjustments for:• depreciation 7,823 7,160• value adjustments to receivables 7,579 11,093• value adjustments to participating interests –210 –181• exchange rate differences on property and equipment 180 –196• movements in provisions 2,061 367• other movements in accrued and deferred items –12,352 –7,253
Cashflow from business operations 45,808 41,115
Movement in government paper –4,451 –160,782Movement in banks, deposits not on demand 144,882 –137,111Movement in loans –956,947 –732,701Movements in shares –61 –Movement in banks, liabilities not on demand –14,829 –7,478Movement in funds entrusted 993,736 638,725Other movements from operating activities –3,410 1,984
Cashflow from operating activities 204,728 –356,248
Cashflow from investment activitiesInvestment in interest-bearing securities –1,041,277 –1,066,526Desinvestment in interest-bearing securities 1,061,934 580,081Investment in participating interests –4,208 –123Desinvestment in participating interests – –Net investments in:• intangible fixed assets –8,598 –4,231• property and equipment –23,192 –5,020
Cashflow from investment activities -15,341 -495,819
Cashflow from financing activitiesRedemption in subordinated liabilities – –50Increase in equity 39,621 23,029Payment of cash dividend –4,117 –4,354Purchases of depository receipts for own shares –6 3
Cashflow from financing activities 35,498 18,628
Net cashflow 224,885 –833,439
Cash and cash equivalents at beginning of the year 359,677 1,193,116
Cash and cash equivalents at the end of the year 584,562 359,677On demand deposits with central banks 285,819 175,225On demand deposits with banks 298,743 184,452
Cash and cash equivalents at the end of the year 584,562 359,677
Supplementary disclosure of the cashflow from operating activitiesInterest paid –41,225 –48,347Interest received 185,448 168,765Tax on profit paid –15,054 –9,365Dividend received from investments 101 109
Notes to the ConsolidatedFinancial Statementsin thousands of EUR
GeneralTriodos Bank, having its legal address inNieuweroordweg 1 in Zeist, The Netherlands, is apublic limited liability company under Dutch law.
Basis of preparation
The Annual Accounts were prepared in accordancewith the legal requirements for the Annual Accounts ofbanks contained in Section 14 Title 9 Book 2 of TheNetherlands Civil Code. The Annual Accounts relate tothe thirty-fifth financial year of Triodos Bank NV.
These financial statements have been prepared on thebasis of the going concern assumption.
Accounting principles
General
Unless stated otherwise, assets are stated at cost,whereby in the case of receivables a provision fordoubtful debt is recognised.
An asset is disclosed in the balance sheet when it isprobable that the expected future economic benefitsthat are attributable to the asset will flow to TriodosBank and the cost of the asset can be measuredreliably. A liability is recognised in the balance sheetwhen it is expected to result in an outflow from TriodosBank of resources embodying economic benefits andthe amount of the obligation can be measured withsufficient reliability.
Income is recognised in the profit and loss accountwhen an increase in future economic potential relatedto an increase in an asset or a decrease of a liabilityhas arisen, the size of which can be measured reliably.Expenses are recognised when a decrease in theeconomic potential related to a decrease in an asset oran increase of a liability has arisen, the size of whichcan be measured with sufficient reliability.
If a transaction results in a transfer of future economicbenefits and or when all risks relating to assets orliabilities transfer to a third party, the asset or liabilityis no longer included in the balance sheet. Assets andliabilities are not included in the balance sheet if
economic benefits are not probable and/or cannot bemeasured with sufficient reliability.
Income and expenses are attributed to the period towhich they relate or to the period in which the servicewas provided. Revenues are recognised when TriodosBank has transferred the significant risks and rewardsof ownership of the goods to the buyer.
Interest income and commissions from lending are notaccounted for in the profit and loss account if thecollection of the interest and commission is doubtful.
The financial statements are presented in euros, TriodosBank’s functional currency. All financial information ineuros has been rounded to the nearest thousand.
The use of estimates and assumptions in thepreparation of the financial statements
The preparation of the consolidated financialstatements requires Triodos Bank to make estimatesand assumptions that affect the reported amounts ofassets and liabilities and the contingent assets andliabilities at the balance sheet date, and the reportedincome and expenses for the financial year. It mainlyconcerns the methods for determining the fair value ofassets and liabilities and determining impairmentsand other value adjustments. This involves assessingthe situations on the basis of available financial dataand information. For certain categories of assets andliabilities the inherent estimation risk may be higher asa result of lack of liquidity in the relevant markets.Although these estimates with respect to currentevents and actions are made to the best ofmanagement’s knowledge, actual results may differfrom the estimates.
Estimates and underlying assumptions are reviewedon a regular basis. Revisions to accounting estimatesare recognised in the period in which the estimate isrevised or in the period of revision and future periods ifthe revision impacts both the reporting period andfuture periods.
Consolidation Principles
The consolidated financial statements include thefinancial data of Triodos Bank, its group companies
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and other companies over which Triodos Bank hascontrol. Control exists when Triodos Bank has thepower, directly or indirectly, to govern the financial andoperating policies of an entity so as to obtain benefitsfrom its activities. Group companies are participatinginterests in which Triodos Bank has a direct or indirectcontrolling interest. In assessing whether controllinginterest exists, potential voting rights that arecurrently exercisable are taken into account.Companies exclusively acquired with the view to resaleare exempted from consolidation.
The financial statements of subsidiaries are includedin the consolidated financial statements from the datethat control commences until the date that controlceases.
In preparing the consolidated financial statements,intra-group debts, receivables and transactions areeliminated. The group companies are consolidated infull. The financial data for joint ventures are beingconsolidated pro rata to the participating interest held,if consolidation is necessary in order to provide atransparent overview of the assets and result ofTriodos Bank N.V.
List of equity participations in accordance withSections 2:379 and 2:414 of The Netherlands CivilCode:• Kantoor Buitenzorg BV in Zeist, participating interest100%, group company, fully consolidated;• Kantoor Nieuweroord BV in Zeist, participatinginterest 100%, group company, fully consolidated;• Stichting Triodos Beleggersgiro in Zeist, groupcompany, fully consolidated;• Triodos Custody BV in Zeist, participating interest100%, group company, fully consolidated;• Triodos Finance BV in Zeist, participating interest100%, group company, fully consolidated;• Triodos IMMA BVBA in Brussel, participating interest100%, group company, fully consolidated;• Triodos Investment Management BV in Zeist,participating interest 100%, group company, fullyconsolidated;• Triodos Investment Advisory Services BV in Zeist,participating interest 100%, group company, fullyconsolidated;
• Triodos MeesPierson Sustainable InvestmentManagement BV in Zeist, participating interest 50%,joint venture with joint control, consolidated pro ratato the participating interest held;• Triodos Nieuwbouw BV in Zeist, participating interest100%, group company, fully consolidated.
Transactions in foreign currencies
Assets and liabilities related to transactionsdenominated in foreign currencies are converted at thespot rate on the balance sheet date. Transactions andthe resulting income and charges in foreign currenciesare converted at the rate applicable on the transactiondate. The resulting exchange rate differences areaccounted for in the profit and loss account under‘Result on financial transactions’.
Business operations abroad
Assets and liabilities relating to activities in Businessunits abroad located outside the Eurozone areconverted at the spot rate as at the balance sheetdate. Income and expenses for activities in foreignbusiness units outside the Eurozone will be convertedat the exchange rate as at the transaction date. Anyexchange rate differences arising from this will becharged or credited directly to the equity.
Hedging of the net investment in business operationsabroad
Exchange rate differences arising on retranslation of aforeign currency liability accounted for as a hedge of anet investment in foreign business units locatedoutside the Eurozone are taken directly toshareholders’ equity, in the statutory reserve forconversion differences, insofar as the hedge iseffective. The non-effective part is taken to the profitand loss account as expenditure.
Financial instruments
Financial instruments, including derivatives separatedfrom their host contracts, are initially recognised atfair value. If instruments are not measured at fair valuethrough profit and loss, then any directly attributabletransaction costs are included in the initial
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measurement. After initial recognition, financialinstruments are valued in the manner describedbelow.
Banks and loans
Receivables on banks and the loans are valued atamortised cost less any impairment losses. Theimpairment loss is determined per item, with the valueof the collateral provided being taken into account.Next to this specific provision a general provision hasbeen created to cover risk arising from incurred but notreported credit losses.
Government paper and interest-bearing securities
All government paper and interest-bearing securitiesare held in the investment portfolio. They are stated atredemption value less any impairment losses.Differences between the acquisition price and theredemption value are amortised over the remaining lifeof the securities and are recognised as prepaymentsand accrued income or accruals and deferred incomein the balance sheet. Realised changes in the value arerecognised in the profit and loss account.
Shares
Shares are not held in the trading portfolio and arevalued at cost.
Participating interests
Participating interests where significant influence canbe exercised will be valued at net asset value.
Participating interests where no significant influencecan be exercised will be carried at fair value. In thecase of a participating interest that is listed on anactive stock exchange, the fair value will be deemed tobe equal to the most recently published stockexchange price. In the case of a participating interestnot listed on an active stock exchange or where there isno regular price quotation, the fair value will bedetermined to the best of one’s ability using allavailable data, including an annual report audited byan external auditor, interim financial information fromthe institution and any other relevant data provided to
Triodos Bank. Unrealised changes in the value ofparticipating interests where no significant influencecan be exercised are recognised in equity via therevaluation reserve, with the exception of changes invalue below the acquisition price, which will berecognised directly in the profit and loss account.
Realised changes in the value will be recognised in theprofit and loss account.
Exchange rate differences resulting from theconversion of foreign currencies will be charged orcredited directly to the equity.
Intangible fixed assets
Intangible fixed assets are stated at acquisition priceor cost of manufacture minus amortisation. Thesecosts mainly comprise the cost of direct labour; upontermination of the development phase. Theamortisation will be determined in line with theestimated useful life.
Goodwill paid by Triodos Bank for the establishment ofthe branch in Spain will be amortised over a period often years. The goodwill is fully amortised in 2014. Noimpairment for goodwill was recognised.
The development costs for the banking system will beamortised over the estimated useful life from themoment the system is used. The current end-of-lifedate is December 2020. The investment in this bankingsystem has been impaired in 2014 as a result of thedecision by Triodos Investment Management not to usethis system anymore for the administration of certaininvestment funds.
Management contracts paid by Triodos Bank whenacquiring the participating interest in TriodosInvestment Management BV will be written off over aperiod of 20 years. The remaining depreciation periodis eleven years. No impairment was recognised.
Computer software that has been purchased will bewritten off over its useful life. This period will notexceed five years.
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Property and equipment
Property under development is valued at the lower ofthe expenditure and the expected replacement costupon completion. The expenditure consists ofpayments made to third parties.
Property for own use is stated at the current cost,which is derived from the replacement cost. Avaluation is carried out at least every five years by anexternal appraiser. The last valuation took placeNovember 2013. The buildings for own use aredepreciated according to the straight-line method onthe basis of an estimated useful economic life of 40years. Land for own use is not depreciated.
Equipment is stated at acquisition price less straight-line depreciation on the basis of estimated usefuleconomic life. The depreciation periods vary from threeto ten years.
Provisions
Provisions are valued at the nominal value of theexpenses expected to be incurred in settling theliabilities and losses. The provisions mainly consist ofa provision for major building maintenance which isbased on a long-term maintenance programme.
Purchases of depository receipts for own shares
The purchasing and reissuing of depository receipts forown shares is charged or credited respectively to theOther reserves. Any balance remaining after the re-issuing of all own depository receipts purchased shallbe placed at the disposal of the Annual GeneralMeeting.
Own depository receipts for shares may be purchasedup to 2% of the issued and paid-up share capital.
A decision to purchase own depository receipts may bemade if the supply of existing depository receiptsexceeds the demand for new depository receipts. Forthis, authority has been given to management by theAnnual General Meeting.
Derivatives and hedge accounting
Derivatives are measured at fair value, except if thecost model for hedge accounting is applied.
Derivatives embedded in contracts shall be separatedfrom the host contract and accounted for separately atfair value if:• the economic characteristics and risks of the hostcontract and the embedded derivative are not closelyrelated;• a separate instrument with the same terms andconditions as the embedded derivative would meet thedefinition of a derivative; and• the combined instrument is not measured at fairvalue with changes in fair value recognised throughprofit and loss.
If forward exchange contracts are concluded to hedgemonetary assets and liabilities in foreign currencies,cost hedge accounting is applied. Hedge accounting isapplied to ensure that the gains or losses arising fromthe translation of the monetary items recognised in theprofit and loss account are offset by the changes in thevalue of forward exchange contracts arising from thedifference between the spot rate at inception and spotrates as at reporting date. The difference between thespot rate agreed at the inception of the forwardexchange contract and the forward rate is amortisedover the term of the contract.
If cost hedge accounting is applied to hedge interestrate risk, derivatives are measured at fair value uponinitial recognition. As long as a derivative hedges aninterest risk in connection with an expected futuretransaction, it is not remeasured. As soon as anexpected transaction leads to the recognition in theprofit and loss account of a financial asset or financialliability, the gains or losses associated with thederivative are recognised in the profit or loss accountin the same period in which the asset or liabilityaffects profit or loss.
Triodos Bank has documented its hedging strategy andhow it relates to the objective of risk management.Triodos Bank has documented its assessment ofwhether the derivatives that are used in hedgingtransactions are effective in ofsetting:
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• currency results of the hedged items using genericdocumentation;• interest rate results of the hedged items usingdocumentation per hedged item.
Any overhedge is recognised directly in the profit andloss account at fair value.
Hedging relationships are terminated upon the expiryor sale of the respective derivatives. The cumulativegain or loss that has not yet been included in the profitand loss account is recognised as a deferred item inthe balance sheet until the hedged transactions havetaken place. If the transactions are no longer expectedto take place, the cumulative gain or loss is accountedfor in the profit and loss account.
Taxation on operating result
Taxes are calculated on the pre-tax result on the basisof the applicable profit tax rates. Exempted profititems, deductible items, additions and differencesbetween the balance sheet value and the fiscal valueof particular assets and liabilities are taken intoaccount.
Deferred tax items arising from differences betweenthe balance sheet value and the fiscal value are valuedat nominal value insofar these may be recoveredthrough future profits (temporary differences).
Earnings per share
Earnings per share is calculated on the basis of theweighted average number of shares outstanding. Incalculating the weighted average number of sharesoutstanding:• Own shares held by Triodos Bank are deducted fromthe total number of shares in issue;• The computation is based on monthly averages.
Cash flow statement
The cashflow statement sets out the movement inTriodos Bank’s funds, broken down into operatingactivities, investment activities and financingactivities. The funds consist of cash and the ondemand deposits with banks. The cashflow statementis produced using the indirect method.
For further details about these accounting principles,please refer to the corresponding notes to the financialstatements.
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Assets
1. Cash
The balance sheet value of the cash as at 31 December can be broken down as follows:
2015 2014
On demand deposit Dutch Central Bank 157,282 71,829
On demand deposit Belgian Central Bank 12,376 11,663
On demand deposit German Central Bank 1,798 1,424
On demand deposit Spanish Central Bank 97,367 78,470
Cash in ATM's 16,996 11,839
Balance sheet value as at 31 December 285,819 175,225
2. Government Paper
2015 2014
Dutch treasury bonds – 90,000
Spanish treasury bonds 140,000 75,000
United Kingdom treasury bonds 73,233 43,782
213,233 208,782
The movement in the Goverment paper is as follows:
2015 2014
Balance sheet value as at 1 January 208,782 48,000
Purchase 382,397 278,782
Repayments –380,268 –118,000
Sale – –
Exchange rate results on foreign currencies 2,322 –
Balance sheet value as at 31 December 213,233 208,782
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3. Banks
2015 2014
On demand deposits with banks 298,743 184,452
Deposits with banks 246,409 391,291
545,152 575,743
The on demand deposits can be freely disposed of.
Banks classified by residual maturity:
2015 2014
On demand 298,743 184,452
1 to 3 months 245,409 326,791
3 months to 1 year – 62,500
1 to 5 years 1,000 1,000
Longer than 5 years – 1,000
545,152 575,743
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The balance sheet value of the banks as at 31 December can be broken down as follows:
2015 2014
ABN Amro 119,930 135,709
Banco Cooperativo 26,436 29,750
Barclays 55,919 46,336
Belfius Bank 3 40,003
Coventry 40,680 38,631
DZ Bank 27,819 4,609
Frankfurter Volksbank 16 29,549
ING Bank 55,285 42,574
Van Lanschot Bank 1,384 2,051
Nationwide Building Society 40,680 38,631
Rabobank 101,936 99,232
Royal Bank of Scotland 51,894 45,801
Yorkshire Bank 20,340 19,316
Other 2,830 3,551
545,152 575,743
4. Loans
2015 2014
Loans 5,283,743 4,334,038
Provision for doubtful debts –68,051 –67,714
5,215,692 4,266,324
This relates to loans to customers.
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Loans classified by residual maturity:
2015 2014
Payable on demand 218,517 257,525
1 to 3 months 730,377 337,852
3 months to 1 year 359,261 283,496
1 to 5 years 1,202,835 1,038,412
Longer than 5 years 2,772,753 2,416,753
5,283,743 4,334,038
EUR 726.5 million (2014: EUR 302.0 million) of the loans relates to loans to local authorities with a maximumoriginal maturity of one year and one day.
The movement of the provision for doubtful debts is as follows:
2015Specific
2015General
2015Total
2014Specific
2014General
2014Total
Balance sheet value as at 1 January 66,717 997 67,714 61,201 848 62,049
Addition 11,796 1,778 13,574 21,042 288 21,330
Write-off –7,682 – –7,682 –6,448 – –6,448
Release –5,591 –228 –5,819 –9,436 –160 –9,596
Exchange rate differences 253 11 264 358 21 379
Balance sheet value as at 31 December 65,493 2,558 68,051 66,717 997 67,714
The provision does not relate to contingent liabilities and irrevocable facilities. In the provision for doubtfuldebts is included an Incurred But Not Reported (IBNR) provision in the amount of EUR 2.6 million (2014:EUR 1.0 million).
EUR 0.4 million of the addition to the provision relates to interest that has been invoiced but has not beenreceived (2014: EUR 0.9 million).
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5. Interest-bearing Securities
2015 2014
Dutch Government bonds 119,800 269,800
Belgian Government bonds 285,600 336,144
Spanish Government bonds 332,300 289,000
United Kingdom Government bonds 87,733 97,093
Other bonds 864,535 718,588
1,689,968 1,710,625
The balance sheet value of the other bonds as at 31 December can be broken down as follows:
2015 2014
Nederlandse Financieringsmaatschappij voor Ontwikkelingslanden(FMO) Sustainable bond (government guaranteed), The Netherlands1) 170,000 140,000
Instituto de Credito Oficial (government guaranteed), Spain 96,672 75,000
Climate Awareness bond European Investment Bank1) 61,780 55,000
Region Wallonne, Belgium 60,000 30,000
Sustainable energy bond Landwirtschaftliche Rentenbank(government guaranteed), Germany1) 50,000 50,000
Regional Government, Spain 49,865 35,640
Nederlandse Financieringsmaatschappij voor Ontwikkelingslanden(FMO) (government guaranteed), The Netherlands 40,000 40,000
Nordic Investment Bank, Finland1) 40,000 40,000
Bank Nederlandse Gemeenten (BNG), The Netherlands 36,683 70,753
European Investment Bank 35,000 35,000
NRW Bank green bond (government guaranteed), Germany1) 34,560 15,000
Société Régionale Wallonne du Transport (goverment guaranteed),Belgium 30,000 15,000
La Communauté française de Belgique, Belgium 25,000 15,000
Aquafin NV, Belgium1) 20,000 –
Kreditanstalt für Wiederaufbau (government guaranteed) Germany1) 19,780 13,000
ABN AMRO Bank N.V., The Netherlands 1) 16,000 –
De Société Publique de Gestion de l'Eau (SPGE), Belgium 15,000 15,000
Nederlandse Waterschapsbank, The Netherlands 14,895 14,895
Nederlandse Waterschapsbank, The Netherlands1) 12,000 12,0001) These are Green/sustainable bonds of which the proceeds are invested by the issuer in areas such as sustainable
energy, energy efficiency and microfinance.
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2015 2014
Bayern, Freistaat, Germany 10,800 10,800
Investitionsbank Berlin Anleihe, Germany 10,000 –
Provincie Vlaams-Brabant, Belgium 6,000 6,000
Brussels Region, Belgium 5,000 5,000
Societe Wallone du credit social (goverment guaranteed), Belgium 5,000 5,000
Ethias Vie, Belgium 500 500
Landwirtschaftliche Rentenbank, Germany – 20,000
864,535 718,588
1) These are Green/sustainable bonds of which the proceeds are invested by the issuer in areas such as sustainableenergy, energy efficiency and microfinance.
Part of the value of securities is used as collateral for a possible debit balance, amounting to EUR 45.5 million atthe Dutch Central Bank (2014: EUR 50.0 million) and EUR 23.5 million at a bank in The Netherlands (2014:EUR 19.6 million). The security for drawn loans amounts to EUR 4.3 million (2014: EUR 8.3 million) at a bank inSpain.
In connection with differences between the acquisition prices and redemption values, as at 31 December 2015an amount of EUR 39.8 million (2014: EUR 39.5 million) has been included under Prepayments and accruedincome and an amount of EUR 1.5 million (2014: EUR 2.3 million) has been included under Accruals anddeferred income.
As part of the interest rate risk management Triodos Bank entered into an interest rate swap to hedge theinterest risk on a fixed interest rate bond. The critical terms of the interest rate swaps such as nominal amount,maturity date and interest payment dates fully match the terms of the respective bonds. The total notionalvalue of these bonds is EUR 1,000 which equals the notional value of the interest rate swaps (EUR 1,000). Thefair value of the interest rate swaps as at 31 december 2015 is EUR 0.1. Triodos Bank applies cost price hedgeaccounting on these interest rate swaps and therefore the fair value is not recognised on the balance sheet.
The movement in interest-bearing securities is as follows:
2015 2014
Balance sheet value as at 1 January 1,710,625 1,224,180
Purchase 1,036,128 1,061,750
Repayments –1,061,934 –580,081
Sale – –
Exchange rate results on foreign currencies 5,149 4,776
Balance sheet value as at 31 December 1,689,968 1,710,625
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6. Shares
2015 2014
S.W.I.F.T. SCRL 20 3
Triodos Multi Impact Fund 45 –
SEPA Biogasanlage Hattingen GmbH – 1
65 4
The shares in S.W.I.F.T. SCRL are held in the framework of the Bank's participation in S.W.I.F.T. paymenttransactions. The shares in Triodos Multi Impact Fund are held in the framework of the Triodos InvestmentManagement activities. The shares in SEPA Biogasanlage Hattingen GmbH were held in conjunction with agranted loan.
The movement in shares is as follows:
2015 2014
Balance sheet value as at 1 January 4 4
Purchase 62 –
Sales –1 –
Balance sheet value as at 31 December 65 4
7. Participating Interests
2015 2014
Other participating interests 13,803 8,720
As part of its mission, Triodos Bank wishes sustainable banking to create more and more impact over the world.In this respect, Triodos Bank provides equity funding to like minded financial institutions in order to increasegrowth of the sustainable banking sector. No significant influence can be exercised on our participatinginterests. The value of these interests in the amount of EUR 13.8 million (2014: EUR 8.7 million) is based on thepublished share price. In absence of a public share price or if such a public share price is established in a nonactive stock exchange market (low trading activity), such as with New Resource Bank, Triodos Bank estimatesthe fair value through the net asset value. We have participating interests in the New Resource Bank, SanFrancisco, Merkur Bank, Copenhagen, Cultura Bank, Oslo, GLS Gemeinschaftsbank eG, Bochum, BancaPopolare Etica Scpa, Padova, Ekobanken Medlemsbank, Järna, Social Enterprise Finance Australia Limited,Sydney, Bpifrance Financement, Maisons-Alfort, Sustainability – Finance – Real Economies SICAV-SIF,Luxembourg, Sustainalytics Holding B.V., Amsterdam and the Nederlandse Financieringsmaatschappij voorOntwikkelingslanden N.V. (FMO), The Hague.
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The movement in this item is as follows:
2015 2014
Balance sheet value as at 1 January 8,720 7,630
Acquisitions 2,185 113
Increase of capital 2,023 10
Revaluation 313 377
Repayment of capital – –
Exchange rate results on foreign currencies 562 590
Balance sheet value as at 31 December 13,803 8,720
8. Intangible Fixed Assets
2015 2014
Development costs for information systems 14,231 8,748
Management contracts 2,166 2,367
Computer software 2,192 2,249
18,589 13,364
The development costs for information systems contain costs for the development of a Bank’s ICT system.
The movement in the development costs for the information systems item is as follows:
2015 2014
Purchase value as at 1 January 23,199 20,602
Cumulative amortisation as at 1 January –14,451 –12,981
Balance sheet value as at 1 January 8,748 7,621
Capitalised expenses 7,243 2,658
Amortisation* –1,760 –1,333
Impairments – –198
Balance sheet value as at 31 December 14,231 8,748
* excluding disposal in the amount of EUR 0.2 million (2014: EUR 0.0 million).
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Management contracts
The management contracts relate to contracts for the management of funds by Triodos InvestmentManagement. When it acquired its participating interest in Triodos Investment Management, Triodos Bank paida sum for this to Triodos Holding.
The movement in management contracts is as follows:
2015 2014
Purchase value as at 1 January 4,030 4,030
Cumulative amortisation as at 1 January –1,663 –1,461
Balance sheet value as at 1 January 2,367 2,569
Amortisation –201 –202
Balance sheet value as at 31 December 2,166 2,367
9. Property and Equipment
2015 2014
Property for own use 41,628 23,334
Equipment 16,764 16,487
58,392 39,821
The movement in the property for own use is as follows:
2015 2014
Purchase value as at 1 January 29,100 28,587
Cumulative revaluation as at 1 January –2,269 –2,269
Cumulative depreciation as at 1 January –3,497 –3,061
Balance sheet as at 1 January 23,334 23,257
Purchase 19,081 513
Depreciation –473 –436
Revaluation – –
Exchange rate differences –314 –
Balance sheet value as at 31 December 41,628 23,334
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The property for own use was valued by an external appraiser in November 2013.
The movement in equipment is as follows:
2015 2014
Purchase value as at 1 January 34,414 31,504
Cumulative depreciation as at 1 January –17,927 –15,676
Balance sheet value as at 1 January 16,487 15,828
Purchase 4,487 4,588
Sale* –376 –81
Depreciation* –3,977 –4,054
Exchange rate differences 143 206
Balance sheet value as at 31 December 16,764 16,487
* excluding disposal in the amount of EUR 1.2 million (2014: EUR 1.9 million)
10. Other Assets
The other assets include a claim regarding the deposit guarantee scheme in the amount of EUR 4,551 (2014:EUR 3,759).
11. Prepayments and Accrued Income
The balance sheet value of the prepayments and accrued income as at 31 December can be broken down asfollows:
2015 2014
Premium on investments 39,653 39,467
Interest receivable 39,770 42,466
Deferred taxes 8,044 7,150
Other prepayments and accrued income 64,817 51,498
Balance sheet value as at 31 December 152,284 140,581
The deferred tax item mainly relates to losses of EUR 6.9 million (2014: EUR 6.4 million) incurred by the Germanbranch still to be off-set against future taxable profits which has an unlimited duration.
The other prepayments and accrued income includes currency derivatives for Triodos Investment Funds for theamount of EUR 38,541 (2014: EUR 30,449). This is almost entirely hedged.
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Liabilities
12. Banks
2015 2014
Deposits from banks 39,798 54,627
This item concerns credits held by Kreditanstalt für Wiederaufbau, Germany, LandwirtschaftlicheRentenbanken, Germany and Instituto de Crédito Oficial, Spain, for interest-subsidised loans in the renewableenergy sector.
Deposits with banks classified by residual maturity:
2015 2014
Payable on demand – 5
1 to 3 months 996 1,300
3 months to 1 year 2,127 4,496
1 to 5 years 20,988 23,370
Longer than 5 years 15,687 25,456
39,798 54,627
13. Funds Entrusted
2015 2014
Savings accounts 4,866,530 4,392,823
Other funds entrusted 2,416,034 1,896,005
7,282,564 6,288,828
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Funds entrusted classified by residual maturity:
2015 2014
Payable on demand 5,621,324 4,730,659
1 to 3 months 709,071 614,004
3 months to 1 year 433,928 404,659
1 to 5 years 446,953 442,052
Longer than 5 years 71,288 97,454
7,282,564 6,288,828
14. Other Liabilities
This item consists of various amounts payable, including Dutch and foreign taxation and social securitycontributions totalling EUR 11.9 million (2014: EUR 12.0 million).
15. Accruals and Deferred Income
The balance sheet value of the accruals and deferred income as at 31 December can be broken down as follows:
2015 2014
Discount on investments 1,460 2,277
Interest payable 13,109 14,479
Deferred taxes 3,646 3,518
Other accruals and deferred income 60,625 59,215
Balance sheet value as at 31 December 78,840 79,489
The deferred tax item mainly relates to:• future profits of the German branch that will be taxed in The Netherlands. The duration is unlimited.• temporary differences between the carrying amounts of intangible fixed assets for financial reportingpurposes and the amounts used for taxation purposes. The remaining duration is one to four years.
The other accruals and deferred income includes currency derivatives for Triodos Investment Funds for theamount of EUR 37.508 (2014: EUR 29,422). This is almost entirely hedged.
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16. Provisions
2015 2014
Building maintenance 2,743 1,372
Other provisions 695 5
3,438 1,377
The movement of the provisions is as follows:
2015 2014
Balance sheet value as at 1 January 1,377 1,010
Allocation 2,138 347
Withdrawal –75 –6
Release –4 –
Exchange rate differences 2 26
Balance sheet value as at 31 December 3,438 1,377
17. Subordinated Liabilities
This relates to a 10-year bond loan dated 12 July 2006. The nominal interest rate is 5.625% and the issue priceis at 99.314%. The bonds are subordinated to other liabilities. During the life of the bond, the Bank can purchaseand cancel bonds, subject to the consent of the Dutch Central Bank.
In connection with differences between the acquisition prices and redemption values, as at 31 December 2015an amount of EUR 5 (2014: EUR 9) has been included under Prepayments and accrued income.
The movement in subordinated liabilities is as follows:
2015 2014
Balance sheet value as at 1 January 5,250 5,300
Withdrawal – –50
Balance sheet value as at 31 December 5,250 5,250
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18. Equity
The equity stated on the consolidated balance sheet is equal to that stated on the parent company balancesheet. For a breakdown, please see the Notes to the company Annual Accounts.
Fair values
The following table sets out the fair value of the financial instruments held as at 31 December 2015. The fairvalue of government paper and interest-bearing securities is the market value. The fair value of banks, loans,funds entrusted with a fixed interest term and the subordinated loan has been determined by calculating thenet present value of expected interest and redemption cashflows, taken into account market interest rates as atthe end of the year. The fair value of the other items is assumed to be equal to the balance sheet value.
The fair value of the remaining assets also includes the deferred tax item. The premium and discount for thegovernment paper and interest-bearing securities has been included in the balance sheet value of the interest-bearing securities.
2015 2015 2014 2014
Balance sheetvalue Fair value
Balance sheetvalue Fair value
Assets
Cash 285,819 285,819 175,225 175,225
Government paper includingdiscounts 213,135 213,220 208,782 208,714
Banks 545,152 545,309 575,743 575,809
Loans 5,215,692 5,233,553 4,266,324 4,294,845
Interest-bearing securitiesincluding premiums/discounts 1,728,259 1,788,324 1,741,949 1,818,691
Shares 65 65 4 4
Participating interests 13,803 13,803 8,720 8,720
Other 207,768 191,952* 173,460 153,880*
8,209,693 8,272,045 7,150,207 7,235,888
Liabilities
Banks 39,798 39,798 54,627 54,627
Funds entrusted 7,282,564 7,297,280 6,288,828 6,315,362
Other 106,814 107,004 103,127 103,534
Equity 780,517 780,517 703,625 703,625
Revaluation on equity – 47,446 – 58,740
8,209,693 8,272,045 7,150,207 7,235,888
* The fair value is negatively impacted by the tax effect of all fair value adjustments which has been posted as other.
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The estimated fair values provided by financial institutions are considered not to be comparable on anindividual basis, due to the differences in valuation methods applied and the use of estimates in thesevaluations. The lack of an objective method of valuation means that estimated fair values are subjective inrespect of the expected maturity and interest rates used.
2015 2014
Currency forward contracts:
Gross positive fair value 38,809 30,449
Netting benefits
Netted current credit exposure 13,455 16,499
Collateral held – –
Net derivatives credit exposure 52,264 46,948
Current replacement cost 38,809 30,449
Potential future credit exposure 13,455 16,499
Exposure value 52,264 46,948
The exposure value of the currency forward contracts is calculated with the mark-to-market method. Theexposure value is the sum of current replacement cost and the potential future credit exposure. The currentreplacement cost is equal to the current market values of all contracts with positive values. The potential futurecredit exposure is determined by multipling the notional amounts with the following percentages:
Residual maturity contract
One year or less 1%
Over one year, not exceeding five years 5%
Over five years 7.5%
Off-balance Sheet Liabilities
19. Contingent Liabilities
This item relates to credit-substitute guarantees and non-credit-substitute guarantees that are partly securedby blocked accounts for the same amount.
20. Irrevocable Facilities
These relate to the total liabilities in respect of irrevocable undertakings, which may lead to a further loan.
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Other off-balance sheet liabilities
In addition to the contingent liabilities and irrevocable facilities reported on the balance sheet, the depositguarantee scheme and the investor compensation scheme is applicable as stated in Article 3:259 of the Act onFinancial Supervision.
Rental commitments
in thousands of EUR
Location Amount per annum Residual term
Zeist, The Netherlands 530 32 months
Zeist, The Netherlands 166 24 months
Zeist, The Netherlands 410 36 months
Brussels, Belgium 809 96 months
Edinburgh, United Kingdom 31 105 months
Albacete, Spain 9 2 months
Badajoz, Spain 26 48 months
Barcelona, Spain 116 23 months
Bilbao, Spain 14 3 months
Gerona, Spain 12 37 months
Granada, Spain 31 10 months
La Coruña, Spain 37 9 months
Las Palmas, Spain 9 3 months
Madrid, Spain 230 23 months
Madrid, Spain 35 3 months
Madrid, Spain 19 3 months
Malaga, Spain 80 36 months
Murcia, Spain 24 7 months
Oviedo, Spain 80 11 months
Palma de Mallorca, Spain 22 4 months
Pamplona, Spain 16 3 months
Santa Cruz de Tenerife, Spain 14 3 months
Sevilla, Spain 24 3 months
Valencia, Spain 37 7 months
Valladolid, Spain 22 3 months
Zaragoza, Spain 15 6 months
Frankfurt, Germany 253 42 months
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Lease commitments
in thousands of EUR
Lease commitments relates primarily to cars have been entered between 2 and 48 months with an annualcharge of EUR 880.
Commitments for software use
in thousands of EUR
The following commitments have been entered for software use:• A fixed annual payment of EUR 100 regarding a mortgage tool.• For a period of at least 3 year a variable annual charge of approximately EUR 285 regarding the use of abanking system.
Other Commitments
in thousands of EUR
The following commitments have been entered:• Services relating managing of mortgages for a period of at least 1 year with an annual charge of EUR 672.• Services relating payment transactions for a period of at least 5 years with an variable annual charge ofapproximately EUR 4,050.• Services relating payment transactions for a period of at least 1 year with an variable annual charge ofapproximately EUR 75.• Services relating protection of payment systems for a period of at least 1.5 years with an variable annualcharge of approximately EUR 240.• Services relating providing temporary co-workers for the customer contact center for a period of at least 3months with an variable annual charge of approximately EUR 540.• Services relating archive storage and destruction for a period of at least 3 years with an variable annual chargeof approximately EUR 37.
Triodos Bank works since 2011 on the realisation of a new office building, with the objective to start using thebuilding in 2016. Due to various factors, the effective start of the building works has been postponed to 2017.Completion of the new office is now scheduled for 2018.
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Income
21. Interest Income
2015 2014
Loans 156,229 144,713
Banks 1,316 2,543
Government papers and interest-bearing securities 25,091 26,365
Other investments 116 33
182,752 173,654
The interest income includes revenues derived from loans and related transactions, as well as relatedcommissions, which by their nature are similar to interest payments. There are no transaction results regardingthe interest-bearing securities (2014: nil).
22. Interest Expense
2015 2014
Funds entrusted 37,997 45,348
Subordinated liabilities 299 300
Banks 1,454 1,696
Other 105 60
39,855 47,404
23. Investment Income
2015 2014
Dividend from other participations 101 109
101 109
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24. Commission Income
2015 2014
Guarantee commission 778 605
Share register 2,733 1,936
Payment transactions 16,501 13,904
Lending 12,018 9,842
Asset Management 6,799 5,900
Management fees 31,600 32,028
Other commission income 642 810
71,071 65,025
25. Commission Expense
2015 2014
Commission to agents 350 302
Asset Management 1,104 928
Other commission expense 1,942 1,611
3,396 2,841
26. Result on Financial Transactions
2015 2014
Exchange results for foreign currency transactions 110 1
Transaction results on currency forward contracts 664 550
774 551
27. Other Income
This relates to fees for other services performed and results from asset disposals.
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Expenses
28. Co-worker and Other Administrative Expenses
2015 2014
Co-worker costs:
• salary expenses 58,580 51,394
• pension expenses 7,327 5,839
• social security expenses 11,391 9,377
• temporary co-workers 9,602 6,802
• other staff costs 8,138 6,230
• capitalised co-worker costs –2,672 –1,970
92,366 77,672
Other administrative expenses:
• office costs 5,096 4,653
• IT costs 7,916 7,139
• external administration costs 6,607 5,550
• travel and lodging expenses 3,676 3,567
• fees for advice and auditor 6,177 5,771
• advertising charges 8,187 6,767
• accommodation expenses 6,192 7,850
• other expenses 6,170 12,222
50,021 53,519
142,387 131,191
Average number of co-workers on a full-time basis 979.1 887.8
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Pension expenses
2015 2014
Pension expenses, defined contribution schemes 3,088 2,725
Pension expenses, defined benefit pension schemes 4,239 3,114
7,327 5,839
The pension expenses for the defined contribution schemes and the defined benefit pension schemes arebased on the contributions owed for the financial year.
Pension scheme per country
Triodos Bank’s pension scheme in The Netherlands is a combination of a defined benefit pension scheme and adefined contribution scheme. For the part of the gross annual salary up to EUR 51,417 a defined benefit pensionscheme applies; the obligation vis-à-vis the participating co-workers consists of the granting of the accruedpension. For the part of the gross annual salary above EUR 51,417, a defined contribution scheme applies; thecommitment to the participating co-workers consists of paying the outstanding contribution.
In The Netherlands, co-workers of related parties also participate in the pension scheme. The total pensioncommitment and the resulting expenses are reported within the Notes to the consolidated Annual Accounts ofTriodos Bank NV. Part of the expenses are charged to the respective related parties, based on their share of thetotal salaries of the participating co-workers.
The Triodos Bank pension schemes in Belgium, the United Kingdom, Spain and Germany are definedcontribution schemes that have been placed with life insurance companies in those countries. The commitmentto the participating co-workers consists of paying any outstanding contribution. Participation in the pensionscheme is obligatory for co-workers in Belgium, Spain and the United Kingdom. In Belgium, co-workers’contribution is 2% of salary and the employer’s contribution is 6%. In Spain, the pension contribution is 1.5% ofsalary, paid in full by the employer. In the United Kingdom, the co-workers’ contributions are optional with thosewho opt to do so contributing between 1% and 15% of their salary, and the employer’s contribution amounts to5% or 10% of salary depending on length of service.
In Germany, participation in the pension scheme is voluntary. The co-workers’ contribution is 3.33% of the salaryand the employer’s contribution is 6.67%. 98% of the co-workers in Germany participate in the pension scheme.
Other expenses
The other expenses includes a positive adjustment regarding the estimated loss from the deposit guaranteescheme based on information from the Dutch Banking Accociation in the amount of EUR 1.8 million (2014:positive adjustment of EUR 0.8 million).
International Remuneration and Nomination policy
The International Remuneration & Nomination Policy is based on the principle of human dignity and aims toenhance social coherence within the organisation. The policy incorporates the CEBS Guidelines on
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Remuneration Policies and Practices and the Regulation of De Nederlandsche Bank on Sound RemunerationPolicies. In our view remuneration enables co-workers to earn a decent living and to contribute to theorganisation and society at large. Triodos Bank believes in the intrinsic motivation of its co-workers tocontribute to our mission and to work according to our corporate values. The richness of the contribution ofeach co-worker cannot be translated into a linear, financial incentive. Triodos Bank operates in the financialsector. Therefore its remuneration practice needs to be within the scope of what is expected in the financialsector. It allows for a healthy in- and outflow of co-workers. At the same time Triodos Bank maintains arelatively low ratio between the lower and higher level of salaries paid. Variable components are modest anddiscretionary. This all contributes to a strong sense of being jointly responsible for realising the mission ofTriodos Bank.
This International Remuneration and Nomination Policy has been revised in 2015 and was approved by theSupervisory Board on 5 November 2015.
The remuneration paid to the members of the Executive Board is set by the Supervisory Board upon advice ofthe Nomination and Compensation Committee. The basic principles of the Triodos Bank remuneration systemare taken into account.
The remuneration paid to Supervisory Board members and members of the Foundation for the Administration ofTriodos Bank Shares (SAAT) Board is set at the Annual General Meeting of Shareholders and the annual Meetingof Depository Receipt Holders respectively, whereby modest remuneration is offered so that sufficient qualifiedmembers can be attracted and retained.
Key elements of Triodos Bank’s international remuneration and nomination policy are:• Triodos Bank continues not to offer bonus or share option schemes to either members of the Executive Board,the Supervisory Board, the Board of SAAT or co-workers. Financial incentives are not considered an appropriateway to motivate and reward co-workers in a values-based bank. In addition, sustainability is by its very naturethe result of a combined effort by team members aimed at both the short and long term.• Triodos Bank may provide additional individual "tokens of appreciation" to co-workers to a maximum of onemonths’ salary with a maximum of EUR 10,000 gross a year. These contributions are for extraordinaryachievements and are at the discretion of management after consultation with Human Resources. Such a tokenis not based on pre-set targets, and always offered in retrospect. The Tokens of Appreciation are subject to clawback arrangements. The members of the Executive Board are excluded from these awards.• An annual, collective token of appreciation can be paid for the overall achievements and contribution of all co-workers. This very modest amount is the same, for all co-workers with a maximum of € 500 for each co-worker.This can be paid in cash or in Triodos Bank NV depository receipts. For 2015 a collective end-of-year token ofappreciation of EUR 500 was awarded. This amount is equal for all co-workers whether they work full-time orpart time and pro-rata if not in service throughout the whole year.• The factor by which the maximum salary in the lowest scale and the maximum salary for senior managementdiffers, will be monitored carefully in each country (the ratio in The Netherlands was 9.8 in 2015 (it was 9.6in 2014)), to ensure the discrepancy between the highest and lowest remunerated co-workers is not excessive.• Severance payments should be modest and should never reward failure or misconduct. Severance paymentsto members of the Executive Board do not exceed one year’s salary.
More details on the Triodos Bank remuneration policy ar available on the www.triodos.com website.
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The table below provides the loans that have been granted to the members of the Executive Board.
2015 2015 2015 2014 2014 2014
Amountoutstanding
Averageinterest rate Repayments
Amountoutstanding
Averageinterest rate Repayments
Pierre Aeby 125 3.5% – 125 3.6% –
Jellie Banga 579 2.0% – – – –
No other loans, advances or guarantees have been granted to members of the Executive Board, SupervisoryBoard members or members of SAAT's Board. For reasons of principle, no share option scheme is offered tomembers of the Executive Board, Supervisory Board members or members of SAAT's Board.
Remuneration paid to the Executive Board
The remuneration paid to the members of the Executive Board is as follows:
2015 2014
Fixed salary expenses 754 713
Variable salary expense1) 2 1
Pension expenses 68 154
Pension allowance for salary above € 100.000 96 –
Private use company car 43 28
Social expenses 35 35
998 931
1) In 2015 a collective end-of-year Token of Appreciation of EUR 500 (2014: EUR 300) per person was granted to all TriodosBank co-workers.
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The salary expenses of the Executive Board may be broken down as follows:
2015 2014
Pierre Aeby 245 236
Peter Blom 291 280
Jellie Banga 218 197
754 713
Remuneration paid to the Supervisory Board
The remuneration paid to the Supervisory Board is as follows:
2015 2015 2015 2015 2014
Amounts in EUR RemunerationFees for
CommitteesCompensationfor travel time Total Total
Ernst-Jan Boers(as from 23 May 2014) 17,500 4,000 1,500 23,000 14,834
David Carrington 17,500 3,583 12,000 33,083 24,500
Marcos Eguiguren Huerta(until 22 May 2015) 7,292 1,667 4,000 12,959 26,500
Aart Jan de Geus (Chair)(as from 23 May 2014) 25,000 3,000 4,000 32,000 18,667
Mathieu van denHoogenband 17,500 4,250 4,000 25,750 24,750
Jan Lamers(until 23 May 2014) – – – – 8,292
Udo Philipp(as from 22 May 2015) 10,208 1,750 3,000 14,958 –
Margot Scheltema(until 22 May 2015) 7,292 2,083 – 9,375 23,000
Hans Voortman (Chair)(until 23 May 2014) – – – – 13,167
Carla van der Weerdt 17,500 4,583 – 22,083 22,500
119,792 24,916 28,500 173,208 176,210
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The following fees apply:• EUR 17,500 per annum for an ordinary member;• EUR 25,000 per annum for the Chair;• EUR 4,000 per annum for a member of the Audit & Risk Committee;• EUR 5,000 per annum for the chair of the Audit & Risk Committee;• EUR 3,000 per annum for members of the Nomination and Compensation Committee;• EUR 4,250 per annum for the chair of the Nomination and Compensation Committee;• EUR 1,000 per return travel (to a maximum of EUR 12,000 per annum) as compensation for travelling time forthose Supervisory Board members who travel to a meeting outside their home country.
Mr. Carrington (as from 22 May 2015), Mr. Eguiguren Huerta (until 22 May 2015), Ms. Van der Weerdt (Chair asfrom 22 May 2015), Ms. Scheltema (Chair until 22 May 2015) and Mr. Boers are the members of the Audit & RiskCommittee. Mr. Van den Hoogenband (Chair), Mr. Carrington (until 22 May 2015), Mr. Philipp (as from 22 May2015) and Mr. De Geus are the members of the Nomination and Compensation Committee.
Remuneration of the Board of SAAT
The remuneration for the members of the Board of the Foundation for the Administration of Triodos BankShares, is as follows (amounts in EUR):
2015 2015 2015 2014
Amounts in EUR RemunerationCompensationfor travel time Total Total
Marjatta van Boeschoten 7,000 5,000 12,000 10,000
Sandra Castaneda Elena 7,000 5,000 12,000 10,000
Frans de Clerck 7,000 9,000 16,000 12,000
Mike Nawas (as from 23 May 2014) 7,000 10,000 17,000 6,667
Jan Nijenhof (until 23 May 2014) – – – 4,917
Josephine de Zwaan (Chair) 10,000 4,000 14,000 12,500
38,000 33,000 71,000 56,084
The following fees apply:• EUR 7,000 per annum for an ordinary member;• EUR 10,000 per annum for the chairperson;• EUR 1,000 per return travel (with a maximum of 10 return travels per annum) as compensation for travellingtime for those Board members who travel to a meeting outside their home country.
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Auditor’s fees
The table below specifies the fees of the KPMG audit firm that relates to services concerning the financial year.
The column Other KPMG network specifies the fees that were invoiced by KPMG units with the exception ofKPMG Accountants NV.
2015KPMG
Accountants NVOther
KPMG networkTotal
KPMG network
Audit of the financial statements 646 263 909
Other audit-related engagements** 95 – 95
Tax-related advisory services – 7* 7
Other non-audit services – – –
Total 741 270 1,011
* This relates to contractual agreements agreed and signed in 2012.** These are allowed review activities.
2014KPMG
Accountants NVOther
KPMG networkTotal
KPMG network
Audit of the financial statements 478 244 722
Other audit-related engagements** 127 15 142
Tax-related advisory services – 40* 40
Other non-audit services – – –
Total 605 299 904
* This relates to contractual agreements agreed and signed in 2012.** These are allowed review activities.
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29. Depreciation, Amortisation and Value Adjustments of Intangible and Tangible Fixed Assets
2015 2014
Amortisation of intangible fixed assets 3,329 2,476
Impairment of intangible fixed assets – 198
Depreciation of property and equipment 4,504 4,488
Impairment of property for own use – –
7,833 7,162
Depreciation has been reduced by the part that is charged on to related parties.The property for own use was valued by an external appraiser in November 2013.
30. Impairments Loan Portfolio
This item consists of expenses associated with write-downs on loans and other receivables. In 2015, there is anexpense item of EUR 7.6 million (2014: expense of EUR 11.1 million).
31. Taxation on Operating Result
2015 2014
Taxation to be paid 14,045 11,561
Deferred taxation –772 –1,360
13,273 10,201
The reconciliation between the statutory and the effective taxation rate is as follows:
2015 2014
Result before taxation 54,000 40,326
Statutory tax rate 25.0% 25.0%
Statutory tax amount 13,500 10,082
Difference arising from other tax rates abroad,exemptions and non-deductible items –222 111
Restatement of deferred taxation items as the result of amendedtax rates –5 8
Effective tax amount 13,273 10,201
Effective tax rate 24.6% 25.3%
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Fiscal unity
Triodos Bank, as a parent company, forms a tax unity for value added tax and corporate income tax purposeswith Triodos Finance, Triodos Investment Management, Triodos Investment Advisory Services, KantoorBuitenzorg, Kantoor Nieuweroord and Triodos Nieuwbouw as subsidiaries. The method chosen for the taxationset-off between Triodos Bank and its subsidiaries is that of proceeding as if the legal entities wereindependently liable to pay tax. In fact, the legal entities are jointly and severally liable for the tax liabilities ofthe companies belonging to the fiscal unity.
Related PartiesTriodos Bank has links with the following legal entities:• Triodos Bank provides services to Triodos Mees Pierson and Triodos Fair Share Fund at competitive rates. Theservices relate to the secondment of co-workers, management services, administration, accommodation, ICTand advertising.• Triodos Bank holds funds of and provides banking services to related parties at competitive rates.• Triodos Bank provides credit facilities and bank guarantees to investment funds and international funds atcompetitive rates.• Triodos Bank, Triodos Investment Management and Triodos Investment Advisory Services carry outmanagement activities for investment funds and receive a competitive management fee for these activities.• Stichting Triodos Beleggersgiro act as intermediair for investment funds.• Triodos Custody performs custodial services for Triodos Fair Share Fund at a competitive fee.• Triodos Bank distributes and registers securities, issued by investment funds and placed with customers ofTriodos Bank, at competitive rates.• Triodos Bank performs currency transactions for investment funds and international funds at competitiverates.• Triodos Investment Management provides supervisory director activities for Sustainalytics BV and receive acompetitive fee.• Triodos Investment Management, Triodos Investment Advisory Services and Triodos Mees Pierson obtainsinformation for research into sustainability from Sustainalytics at competitive rates.• Triodos Investment Management obtains services regarding investment strategies from Enclude atcompetitive rates.
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Segment Reporting
Key Figures 2015 by Branch and Business Unit
in thousands of EUR
BankThe
NetherlandsBank
Belgium
BankUnited
KingdomBank
SpainBank
Germany
Totalbanking
activitiesInvestment
Management
InvestmentAdvisoryServices
PrivateBanking Other
Eliminationintercompany
transactions Total
Funds entrusted 2,781,367 1,504,188 1,152,990 1,660,169 193,638 7,292,352 –9,788 7,282,564
Number of accounts 351,446 67,784 49,519 226,027 12,281 707,057 707,057
Loans 2,179,092 1,158,488 843,078 825,932 210,085 5,216,675 –983 5,215,692
Number 32,121 2,875 1,290 6,133 1,999 44,418 44,418
Balance sheet total 3,228,930 1,700,551 1,364,613 1,868,983 272,858 8,435,935 1,224,899 –1,449,683 8,211,151
Funds under management1) 3,144,561 920,178 22,246 4,086,985
Total assets under management 3,228,930 1,700,551 1,364,613 1,868,983 272,858 8,435,935 3,144,561 920,178 1,247,145 –1,449,683 12,298,136
Total income 62,883 40,212 28,531 37,206 6,764 175,596 28,977 1,674 4,981 3,124 –2,763 211,589
Operating expenses –38,962 –27,292 –16,783 –30,589 –8,671 –122,297 –21,235 –1,320 –4,201 –3,967 2,800 –150,220
Impairments loan portfolio –3,125 –1,101 –166 –2,726 –461 –7,579 –7,579
Value adjustments to participations 210 210
Operating result 20,796 11,819 11,582 3,891 –2,368 45,720 7,742 354 780 –633 37 54,000
Taxation on operating result –4,951 –3,579 –2,481 –961 594 –11,378 –1,936 –89 –188 327 –9 –13,273
Net profit 15,845 8,240 9,101 2,930 –1,774 34,342 5,806 265 592 –306 28 40,727
Average number of co-workers on afull-time basis 149.8 112.2 110.8 248.5 40.1 661.4 112.4 3.6 18.9 182.8 979.1
Operating expenses/total income 62% 68% 59% 82% 128% 70% 73% 79% 84% 71%
1) Note that at the time this statement was prepared, the Annual Accounts of funds under management had not yet been finalised.
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in thousands of EUR
BankThe
NetherlandsBank
Belgium
BankUnited
KingdomBank
SpainBank
Germany
Totalbanking
activitiesInvestment
Management
InvestmentAdvisoryServices
PrivateBanking Other
Eliminationintercompany
transactions Total
Funds entrusted 2,781,367 1,504,188 1,152,990 1,660,169 193,638 7,292,352 –9,788 7,282,564
Number of accounts 351,446 67,784 49,519 226,027 12,281 707,057 707,057
Loans 2,179,092 1,158,488 843,078 825,932 210,085 5,216,675 –983 5,215,692
Number 32,121 2,875 1,290 6,133 1,999 44,418 44,418
Balance sheet total 3,228,930 1,700,551 1,364,613 1,868,983 272,858 8,435,935 1,224,899 –1,449,683 8,211,151
Funds under management1) 3,144,561 920,178 22,246 4,086,985
Total assets under management 3,228,930 1,700,551 1,364,613 1,868,983 272,858 8,435,935 3,144,561 920,178 1,247,145 –1,449,683 12,298,136
Total income 62,883 40,212 28,531 37,206 6,764 175,596 28,977 1,674 4,981 3,124 –2,763 211,589
Operating expenses –38,962 –27,292 –16,783 –30,589 –8,671 –122,297 –21,235 –1,320 –4,201 –3,967 2,800 –150,220
Impairments loan portfolio –3,125 –1,101 –166 –2,726 –461 –7,579 –7,579
Value adjustments to participations 210 210
Operating result 20,796 11,819 11,582 3,891 –2,368 45,720 7,742 354 780 –633 37 54,000
Taxation on operating result –4,951 –3,579 –2,481 –961 594 –11,378 –1,936 –89 –188 327 –9 –13,273
Net profit 15,845 8,240 9,101 2,930 –1,774 34,342 5,806 265 592 –306 28 40,727
Average number of co-workers on afull-time basis 149.8 112.2 110.8 248.5 40.1 661.4 112.4 3.6 18.9 182.8 979.1
Operating expenses/total income 62% 68% 59% 82% 128% 70% 73% 79% 84% 71%
1) Note that at the time this statement was prepared, the Annual Accounts of funds under management had not yet been finalised.
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Key Figures 2014 by Branch and Business Unit
in thousands of EUR
BankThe
NetherlandsBank
Belgium
BankUnited
KingdomBank
SpainBank
Germany
Totalbanking
activitiesInvestment
Management
InvestmentAdvisoryServices
PrivateBanking Other
Eliminationintercompany
transactions Total
Funds entrusted 2,384,177 1,361,327 975,152 1,420,244 154,401 6,295,301 –6,473 6,288,828
Number of accounts 308,653 62,705 47,014 199,676 10,273 628,321 628,321
Loans 1,582,656 998,375 721,901 782,067 181,598 4,266,597 –273 4,266,324
Number 26,383 2,469 1,243 4,765 1,460 36,320 36,320
Balance sheet total 2,770,420 1,546,153 1,208,688 1,593,189 238,628 7,357,078 1,098,517 –1,303,191 7,152,404
Funds under management1) 2,644,566 812,767 22,091 3,479,424
Total assets under management 2,770,420 1,546,153 1,208,688 1,593,189 238,628 7,357,078 2,644,566 812,767 1,120,608 –1,303,191 10,631,828
Total income 56,128 34,529 23,179 33,782 5,988 153,606 30,501 570 4,455 2,742 –2,283 189,591
Operating expenses –35,841 –24,495 –16,855 –27,891 –8,333 –113,415 –19,929 –529 –3,584 –3,324 2,428 –138,353
Impairments loan portfolio –6,527 –597 948 –2,693 –2,224 –11,093 –11,093
Value adjustments to participations 181 181
Operating result 13,760 9,437 7,272 3,198 –4,569 29,098 10,572 41 871 –401 145 40,326
Taxation on operating result –4,144 –1,961 –1,998 –872 1,320 –7,655 –2,643 –10 –212 357 –38 –10,201
Net profit 9,616 7,476 5,274 2,326 –3,249 21,443 7,929 31 659 –44 107 30,125
Average number of co-workers on afull-time basis 138.9 104.1 107.3 228.0 38.3 616.6 98.7 1.8 15.4 155.3 887.8
Operating expenses/total income 64% 71% 73% 83% 139% 74% 65% 93% 80% 73%
1) Note that at the time this statement was prepared, the Annual Accounts of funds under management had not yet been finalised.
94
in thousands of EUR
BankThe
NetherlandsBank
Belgium
BankUnited
KingdomBank
SpainBank
Germany
Totalbanking
activitiesInvestment
Management
InvestmentAdvisoryServices
PrivateBanking Other
Eliminationintercompany
transactions Total
Funds entrusted 2,384,177 1,361,327 975,152 1,420,244 154,401 6,295,301 –6,473 6,288,828
Number of accounts 308,653 62,705 47,014 199,676 10,273 628,321 628,321
Loans 1,582,656 998,375 721,901 782,067 181,598 4,266,597 –273 4,266,324
Number 26,383 2,469 1,243 4,765 1,460 36,320 36,320
Balance sheet total 2,770,420 1,546,153 1,208,688 1,593,189 238,628 7,357,078 1,098,517 –1,303,191 7,152,404
Funds under management1) 2,644,566 812,767 22,091 3,479,424
Total assets under management 2,770,420 1,546,153 1,208,688 1,593,189 238,628 7,357,078 2,644,566 812,767 1,120,608 –1,303,191 10,631,828
Total income 56,128 34,529 23,179 33,782 5,988 153,606 30,501 570 4,455 2,742 –2,283 189,591
Operating expenses –35,841 –24,495 –16,855 –27,891 –8,333 –113,415 –19,929 –529 –3,584 –3,324 2,428 –138,353
Impairments loan portfolio –6,527 –597 948 –2,693 –2,224 –11,093 –11,093
Value adjustments to participations 181 181
Operating result 13,760 9,437 7,272 3,198 –4,569 29,098 10,572 41 871 –401 145 40,326
Taxation on operating result –4,144 –1,961 –1,998 –872 1,320 –7,655 –2,643 –10 –212 357 –38 –10,201
Net profit 9,616 7,476 5,274 2,326 –3,249 21,443 7,929 31 659 –44 107 30,125
Average number of co-workers on afull-time basis 138.9 104.1 107.3 228.0 38.3 616.6 98.7 1.8 15.4 155.3 887.8
Operating expenses/total income 64% 71% 73% 83% 139% 74% 65% 93% 80% 73%
1) Note that at the time this statement was prepared, the Annual Accounts of funds under management had not yet been finalised.
95
Key Figures 2015 by Country
in thousands of EUR The Netherlands BelgiumUnited
Kingdom Spain Germany France
Eliminationintercompany
transactions Total
Names
Triodos Bank NV,Kantoor Buitenzorg BV,
Kantoor Nieuweroord BV,Stichting Triodos Beleggersgiro,
Triodos Custody BV,Triodos Finance BV,
Triodos Investment Management BV,Triodos Investment Advisory Services BV,
Triodos MeesPierson SustainableInvestment Management BV,
Triodos Nieuwbouw BV
Triodos Bank NV,Triodos IMMA
BVBA Triodos Bank NV Triodos Bank NV Triodos Bank NVTriodos Finance
BV
Nature of activitiesBank, Private Banking and Investment
managementBank and Private
Banking Bank Bank Bank
Agency forbranch Belgium
and marketresearch
Geographical location Zeist Brussel Bristol Madrid Frankfurt Paris
Total income 99,996 40,212 28,531 37,206 6,764 1,643 –2,763 211,589
Operating expenses –68,087 –27,292 –16,783 –30,589 –8,671 –1,598 2,800 –150,220
Impairments loan portfolio –3,125 –1,101 –166 –2,726 –461 – –7,579
Value adjustments to participations 210 210
Operating result 28,994 11,819 11,582 3,891 –2,368 45 37 54,000
Taxation on operating result –6,829 –3,579 –2,481 –961 594 –8 –9 –13,273
Net profit 22,165 8,240 9,101 2,930 –1,774 37 28 40,727
Public subsidies received – – – – – – –
Number of co-workers on a full-timebasis 487.8 115.1 119.8 255.0 41.3 7.0 1,026.0
96
in thousands of EUR The Netherlands BelgiumUnited
Kingdom Spain Germany France
Eliminationintercompany
transactions Total
Names
Triodos Bank NV,Kantoor Buitenzorg BV,
Kantoor Nieuweroord BV,Stichting Triodos Beleggersgiro,
Triodos Custody BV,Triodos Finance BV,
Triodos Investment Management BV,Triodos Investment Advisory Services BV,
Triodos MeesPierson SustainableInvestment Management BV,
Triodos Nieuwbouw BV
Triodos Bank NV,Triodos IMMA
BVBA Triodos Bank NV Triodos Bank NV Triodos Bank NVTriodos Finance
BV
Nature of activitiesBank, Private Banking and Investment
managementBank and Private
Banking Bank Bank Bank
Agency forbranch Belgium
and marketresearch
Geographical location Zeist Brussel Bristol Madrid Frankfurt Paris
Total income 99,996 40,212 28,531 37,206 6,764 1,643 –2,763 211,589
Operating expenses –68,087 –27,292 –16,783 –30,589 –8,671 –1,598 2,800 –150,220
Impairments loan portfolio –3,125 –1,101 –166 –2,726 –461 – –7,579
Value adjustments to participations 210 210
Operating result 28,994 11,819 11,582 3,891 –2,368 45 37 54,000
Taxation on operating result –6,829 –3,579 –2,481 –961 594 –8 –9 –13,273
Net profit 22,165 8,240 9,101 2,930 –1,774 37 28 40,727
Public subsidies received – – – – – – –
Number of co-workers on a full-timebasis 487.8 115.1 119.8 255.0 41.3 7.0 1,026.0
97
Key Figures 2014 by Country
in thousands of EUR The Netherlands BelgiumUnited
Kingdom Spain Germany France
Eliminationintercompany
transactions Total
Names
Triodos Bank NV,Kantoor Buitenzorg BV,
Kantoor Nieuweroord BV,Stichting Triodos Beleggersgiro,
Triodos Custody BV,Triodos Finance BV,
Triodos Investment Management BV,Triodos Investment Advisory Services BV,
Triodos MeesPierson SustainableInvestment Management BV,
Triodos Nieuwbouw BV
Triodos Bank NV,Triodos IMMA
BVBA Triodos Bank NV Triodos Bank NV Triodos Bank NVTriodos Finance
BV
Nature of activitiesBank, Private Banking and Investment
managementBank and Private
Banking Bank Bank Bank
Agency forbranch Belgium
and marketresearch
Geographical location Zeist Brussel Bristol Madrid Frankfurt Paris
Total income 93,125 34,529 23,179 33,782 5,988 1,271 –2,283 189,591
Operating expenses –61,969 –24,495 –16,855 –27,891 –8,333 –1,238 2,428 –138,353
Impairments loan portfolio –6,527 –597 948 –2,693 –2,224 – –11,093
Value adjustments to participations 181 181
Operating result 24,810 9,437 7,272 3,198 –4,569 33 145 40,326
Taxation on operating result –6,641 –1,961 –1,998 –872 1,320 –11 –38 –10,201
Net profit 18,169 7,476 5,274 2,326 –3,249 22 107 30,125
Public subsidies received – – 2 – – – 2
Number of co-workers on a full-timebasis 434.4 106.8 110.3 239.4 40.2 4.0 935.1
98
in thousands of EUR The Netherlands BelgiumUnited
Kingdom Spain Germany France
Eliminationintercompany
transactions Total
Names
Triodos Bank NV,Kantoor Buitenzorg BV,
Kantoor Nieuweroord BV,Stichting Triodos Beleggersgiro,
Triodos Custody BV,Triodos Finance BV,
Triodos Investment Management BV,Triodos Investment Advisory Services BV,
Triodos MeesPierson SustainableInvestment Management BV,
Triodos Nieuwbouw BV
Triodos Bank NV,Triodos IMMA
BVBA Triodos Bank NV Triodos Bank NV Triodos Bank NVTriodos Finance
BV
Nature of activitiesBank, Private Banking and Investment
managementBank and Private
Banking Bank Bank Bank
Agency forbranch Belgium
and marketresearch
Geographical location Zeist Brussel Bristol Madrid Frankfurt Paris
Total income 93,125 34,529 23,179 33,782 5,988 1,271 –2,283 189,591
Operating expenses –61,969 –24,495 –16,855 –27,891 –8,333 –1,238 2,428 –138,353
Impairments loan portfolio –6,527 –597 948 –2,693 –2,224 – –11,093
Value adjustments to participations 181 181
Operating result 24,810 9,437 7,272 3,198 –4,569 33 145 40,326
Taxation on operating result –6,641 –1,961 –1,998 –872 1,320 –11 –38 –10,201
Net profit 18,169 7,476 5,274 2,326 –3,249 22 107 30,125
Public subsidies received – – 2 – – – 2
Number of co-workers on a full-timebasis 434.4 106.8 110.3 239.4 40.2 4.0 935.1
99
Lending by Sector in 2015 after intercompany eliminations
in thousands of EUR Total The Netherlands Belgium Belgium United Kingdom Spain Germany
amount % number amount % number amount % number amount % number amount % number amount % number
Environment
Organic farming 140,308 2.7 830 32,412 1.5 272 3,681 0.3 61 55,472 6.6 277 48,212 5.8 211 531 0.3 9
Organic food 78,360 1.5 709 23,733 1.1 325 13,107 1.1 81 9,174 1.1 53 24,763 3.0 233 7,583 3.6 17
Renewable energy 1,223,512 23.5 861 160,746 7.4 96 419,131 36.2 274 198,248 23.5 156 328,749 39.8 291 116,638 55.5 44
Sustainable property 441,933 8.5 536 281,809 12.9 219 110,263 9.5 135 24,056 2.9 23 25,805 3.1 159 – 0.0 –
Environmental technology 69,723 1.3 166 27,113 1.2 37 20,634 1.8 38 9,028 1.1 12 12,948 1.6 79 – 0.0 –
1,953,836 37.5 3,102 525,813 24.1 949 566,816 48.9 589 295,978 35.2 521 440,477 53.3 973 124,752 59.4 70
Social
Retail non-food 12,721 0.2 157 3,896 0.2 59 1,396 0.1 15 5,065 0.6 13 2,343 0.3 52 21 0.0 18
Production 19,575 0.4 142 3,314 0.2 47 13,488 1.2 63 281 0.0 5 2,492 0.3 24 – 0.0 3
Professional services 74,650 1.4 340 28,761 1.3 104 11,438 1.0 66 29,714 3.5 46 4,709 0.6 72 28 0.0 52
Social housing 381,731 7.3 364 29,482 1.3 132 62,612 5.4 32 275,790 32.7 178 204 0.0 5 13,643 6.5 17
Healthcare 599,668 11.4 1,140 174,963 8.0 432 180,944 15.6 276 95,957 11.4 108 106,410 12.9 267 41,394 19.7 57
Social projects 102,068 2.0 479 1,496 0.1 17 13,677 1.2 92 14,437 1.7 73 72,458 8.8 297 – 0.0 –
Fair trade 2,751 0.1 35 352 0.0 7 757 0.1 12 1,086 0.1 9 430 0.1 5 126 0.1 2
Development cooperation 34,107 0.7 39 25,917 1.2 12 3,612 0.3 15 364 0.0 1 4,214 0.5 11 – 0.0 –
1,227,271 23.5 2,696 268,181 12.3 810 287,924 24.9 571 422,694 50.0 433 193,260 23.5 733 55,212 26.3 149
Culture
Education 163,404 3.1 449 14,450 0.7 68 62,117 5.3 183 28,557 3.4 49 39,217 4.7 128 19,063 9.1 21
Child care 10,879 0.2 80 7,638 0.4 64 2,628 0.2 11 574 0.1 3 39 0.0 2 – 0.0 –
Arts and culture 321,081 6.2 727 226,286 10.4 233 27,718 2.4 109 15,760 1.9 54 51,317 6.1 331 – 0.0 –
Philosophy of life 87,114 1.7 321 16,871 0.8 68 5,528 0.5 27 51,949 6.2 168 12,078 1.5 53 688 0.3 5
Recreation 120,892 2.3 318 58,140 2.7 133 8,825 0.8 36 24,872 2.9 60 28,659 3.5 76 396 0.2 13
703,370 13.5 1,895 323,385 15.0 566 106,816 9.2 366 121,712 14.5 334 131,310 15.8 590 20,147 9.6 39
Private loans 624,047 12.0 36,688 412,972 18.9 29,762 147,323 12.7 1,347 2,694 0.3 2 60,885 7.4 3,837 173 0.1 1,740
Municipality loans 707,168 13.5 37 647,796 29.7 34 49,609 4.3 2 – 0.0 – – 0.0 – 9,763 4.6 1
Total 5,215,692 100.0 44,418 2,178,147 100.0 32,121 1,158,488 100.0 2,875 843,078 100.0 1,290 825,932 100.0 6,133 210,047 100.0 1,999
100
in thousands of EUR Total The Netherlands Belgium Belgium United Kingdom Spain Germany
amount % number amount % number amount % number amount % number amount % number amount % number
Environment
Organic farming 140,308 2.7 830 32,412 1.5 272 3,681 0.3 61 55,472 6.6 277 48,212 5.8 211 531 0.3 9
Organic food 78,360 1.5 709 23,733 1.1 325 13,107 1.1 81 9,174 1.1 53 24,763 3.0 233 7,583 3.6 17
Renewable energy 1,223,512 23.5 861 160,746 7.4 96 419,131 36.2 274 198,248 23.5 156 328,749 39.8 291 116,638 55.5 44
Sustainable property 441,933 8.5 536 281,809 12.9 219 110,263 9.5 135 24,056 2.9 23 25,805 3.1 159 – 0.0 –
Environmental technology 69,723 1.3 166 27,113 1.2 37 20,634 1.8 38 9,028 1.1 12 12,948 1.6 79 – 0.0 –
1,953,836 37.5 3,102 525,813 24.1 949 566,816 48.9 589 295,978 35.2 521 440,477 53.3 973 124,752 59.4 70
Social
Retail non-food 12,721 0.2 157 3,896 0.2 59 1,396 0.1 15 5,065 0.6 13 2,343 0.3 52 21 0.0 18
Production 19,575 0.4 142 3,314 0.2 47 13,488 1.2 63 281 0.0 5 2,492 0.3 24 – 0.0 3
Professional services 74,650 1.4 340 28,761 1.3 104 11,438 1.0 66 29,714 3.5 46 4,709 0.6 72 28 0.0 52
Social housing 381,731 7.3 364 29,482 1.3 132 62,612 5.4 32 275,790 32.7 178 204 0.0 5 13,643 6.5 17
Healthcare 599,668 11.4 1,140 174,963 8.0 432 180,944 15.6 276 95,957 11.4 108 106,410 12.9 267 41,394 19.7 57
Social projects 102,068 2.0 479 1,496 0.1 17 13,677 1.2 92 14,437 1.7 73 72,458 8.8 297 – 0.0 –
Fair trade 2,751 0.1 35 352 0.0 7 757 0.1 12 1,086 0.1 9 430 0.1 5 126 0.1 2
Development cooperation 34,107 0.7 39 25,917 1.2 12 3,612 0.3 15 364 0.0 1 4,214 0.5 11 – 0.0 –
1,227,271 23.5 2,696 268,181 12.3 810 287,924 24.9 571 422,694 50.0 433 193,260 23.5 733 55,212 26.3 149
Culture
Education 163,404 3.1 449 14,450 0.7 68 62,117 5.3 183 28,557 3.4 49 39,217 4.7 128 19,063 9.1 21
Child care 10,879 0.2 80 7,638 0.4 64 2,628 0.2 11 574 0.1 3 39 0.0 2 – 0.0 –
Arts and culture 321,081 6.2 727 226,286 10.4 233 27,718 2.4 109 15,760 1.9 54 51,317 6.1 331 – 0.0 –
Philosophy of life 87,114 1.7 321 16,871 0.8 68 5,528 0.5 27 51,949 6.2 168 12,078 1.5 53 688 0.3 5
Recreation 120,892 2.3 318 58,140 2.7 133 8,825 0.8 36 24,872 2.9 60 28,659 3.5 76 396 0.2 13
703,370 13.5 1,895 323,385 15.0 566 106,816 9.2 366 121,712 14.5 334 131,310 15.8 590 20,147 9.6 39
Private loans 624,047 12.0 36,688 412,972 18.9 29,762 147,323 12.7 1,347 2,694 0.3 2 60,885 7.4 3,837 173 0.1 1,740
Municipality loans 707,168 13.5 37 647,796 29.7 34 49,609 4.3 2 – 0.0 – – 0.0 – 9,763 4.6 1
Total 5,215,692 100.0 44,418 2,178,147 100.0 32,121 1,158,488 100.0 2,875 843,078 100.0 1,290 825,932 100.0 6,133 210,047 100.0 1,999
101
Lending by Sector in 2014 after intercompany eliminations
in thousands of EUR Total The Netherlands Belgium Belgium United Kingdom Spain Germany
amount % number amount % number amount % number amount % number amount % number amount % number
Environment
Organic farming 119,570 2.8 779 30,696 1.9 255 3,368 0.3 66 48,800 6.8 270 35,692 4.6 175 1,014 0.6 13
Organic food 81,271 1.9 659 24,498 1.5 313 12,791 1.3 87 10,433 1.4 55 25,832 3.3 183 7,717 4.2 21
Renewable energy 1,195,564 28.0 809 152,927 9.7 87 399,746 40.0 232 187,142 25.9 139 359,313 45.9 303 96,436 53.1 48
Sustainable property 374,057 8.8 483 222,081 14.0 209 110,342 11.1 118 6,342 0.9 18 35,292 4.5 138 – 0.0 –
Environmental technology 69,114 1.6 161 29,836 1.9 48 21,127 2.1 39 9,520 1.3 14 8,631 1.1 60 – 0.0 –
1,839,576 43.1 2,891 460,038 29.0 912 547,374 54.8 542 262,237 36.3 496 464,760 59.4 859 105,167 57.9 82
Social
Retail non-food 11,634 0.3 149 5,129 0.3 71 1,707 0.2 21 2,878 0.4 21 1,920 0.2 36 – 0.0 –
Production 21,865 0.5 144 4,962 0.3 54 14,608 1.5 68 42 0.0 2 2,253 0.3 20 – 0.0 –
Professional services 82,616 1.9 486 27,381 1.7 110 9,666 1.0 61 42,497 5.9 74 3,038 0.4 65 34 0.0 176
Social housing 336,833 7.9 343 29,370 1.9 142 65,393 6.5 28 228,057 31.5 155 21 0.0 1 13,992 7.7 17
Healthcare 525,090 12.3 1,070 172,371 10.9 414 157,572 15.8 287 63,188 8.8 87 91,868 11.7 207 40,091 22.1 75
Social projects 97,128 2.3 585 1,428 0.1 21 13,778 1.4 83 14,200 2.0 84 67,722 8.7 397 – 0.0 –
Fair trade 2,748 0.1 37 363 0.0 6 1,263 0.1 11 553 0.1 9 442 0.1 8 127 0.1 3
Development cooperation 37,930 0.9 36 28,447 1.8 12 4,585 0.5 14 365 0.1 1 4,533 0.6 9 – 0.0 –
1,115,844 26.2 2,850 269,451 17.0 830 268,572 27.0 573 351,780 48.8 433 171,797 22.0 743 54,244 29.9 271
Culture
Education 144,951 3.4 439 26,454 1.7 79 44,172 4.4 165 21,567 3.0 48 31,747 4.1 99 21,011 11.5 48
Child care 12,941 0.3 110 9,652 0.6 85 2,370 0.2 15 661 0.1 6 258 0.0 4 – 0.0 –
Arts and culture 261,883 6.1 735 182,745 11.6 298 23,354 2.3 110 14,645 2.0 54 41,139 5.2 273 – 0.0 –
Philosophy of life 76,338 1.8 275 14,615 0.9 62 4,014 0.4 21 46,918 6.5 152 10,132 1.3 38 659 0.4 2
Recreation 127,283 3.0 296 59,189 3.7 129 8,662 0.9 43 24,093 3.3 54 34,994 4.5 58 345 0.2 12
623,396 14.6 1,855 292,655 18.5 653 82,572 8.2 354 107,884 14.9 314 118,270 15.1 472 22,015 12.1 62
Private loans 395,552 9.3 28,706 268,357 17.0 23,970 99,857 10.0 1,000 – 0.0 – 27,241 3.5 2,691 97 0.1 1,045
Municipality loans 291,956 6.8 18 291,956 18.5 18 – 0.0 – – 0.0 – – 0.0 – – 0.0 –
Total 4,266,324 100.0 36,320 1,582,457 100.0 26,383 998,375 100.0 2,469 721,901 100.0 1,243 782,068 100.0 4,765 181,523 100.0 1,460
102
in thousands of EUR Total The Netherlands Belgium Belgium United Kingdom Spain Germany
amount % number amount % number amount % number amount % number amount % number amount % number
Environment
Organic farming 119,570 2.8 779 30,696 1.9 255 3,368 0.3 66 48,800 6.8 270 35,692 4.6 175 1,014 0.6 13
Organic food 81,271 1.9 659 24,498 1.5 313 12,791 1.3 87 10,433 1.4 55 25,832 3.3 183 7,717 4.2 21
Renewable energy 1,195,564 28.0 809 152,927 9.7 87 399,746 40.0 232 187,142 25.9 139 359,313 45.9 303 96,436 53.1 48
Sustainable property 374,057 8.8 483 222,081 14.0 209 110,342 11.1 118 6,342 0.9 18 35,292 4.5 138 – 0.0 –
Environmental technology 69,114 1.6 161 29,836 1.9 48 21,127 2.1 39 9,520 1.3 14 8,631 1.1 60 – 0.0 –
1,839,576 43.1 2,891 460,038 29.0 912 547,374 54.8 542 262,237 36.3 496 464,760 59.4 859 105,167 57.9 82
Social
Retail non-food 11,634 0.3 149 5,129 0.3 71 1,707 0.2 21 2,878 0.4 21 1,920 0.2 36 – 0.0 –
Production 21,865 0.5 144 4,962 0.3 54 14,608 1.5 68 42 0.0 2 2,253 0.3 20 – 0.0 –
Professional services 82,616 1.9 486 27,381 1.7 110 9,666 1.0 61 42,497 5.9 74 3,038 0.4 65 34 0.0 176
Social housing 336,833 7.9 343 29,370 1.9 142 65,393 6.5 28 228,057 31.5 155 21 0.0 1 13,992 7.7 17
Healthcare 525,090 12.3 1,070 172,371 10.9 414 157,572 15.8 287 63,188 8.8 87 91,868 11.7 207 40,091 22.1 75
Social projects 97,128 2.3 585 1,428 0.1 21 13,778 1.4 83 14,200 2.0 84 67,722 8.7 397 – 0.0 –
Fair trade 2,748 0.1 37 363 0.0 6 1,263 0.1 11 553 0.1 9 442 0.1 8 127 0.1 3
Development cooperation 37,930 0.9 36 28,447 1.8 12 4,585 0.5 14 365 0.1 1 4,533 0.6 9 – 0.0 –
1,115,844 26.2 2,850 269,451 17.0 830 268,572 27.0 573 351,780 48.8 433 171,797 22.0 743 54,244 29.9 271
Culture
Education 144,951 3.4 439 26,454 1.7 79 44,172 4.4 165 21,567 3.0 48 31,747 4.1 99 21,011 11.5 48
Child care 12,941 0.3 110 9,652 0.6 85 2,370 0.2 15 661 0.1 6 258 0.0 4 – 0.0 –
Arts and culture 261,883 6.1 735 182,745 11.6 298 23,354 2.3 110 14,645 2.0 54 41,139 5.2 273 – 0.0 –
Philosophy of life 76,338 1.8 275 14,615 0.9 62 4,014 0.4 21 46,918 6.5 152 10,132 1.3 38 659 0.4 2
Recreation 127,283 3.0 296 59,189 3.7 129 8,662 0.9 43 24,093 3.3 54 34,994 4.5 58 345 0.2 12
623,396 14.6 1,855 292,655 18.5 653 82,572 8.2 354 107,884 14.9 314 118,270 15.1 472 22,015 12.1 62
Private loans 395,552 9.3 28,706 268,357 17.0 23,970 99,857 10.0 1,000 – 0.0 – 27,241 3.5 2,691 97 0.1 1,045
Municipality loans 291,956 6.8 18 291,956 18.5 18 – 0.0 – – 0.0 – – 0.0 – – 0.0 –
Total 4,266,324 100.0 36,320 1,582,457 100.0 26,383 998,375 100.0 2,469 721,901 100.0 1,243 782,068 100.0 4,765 181,523 100.0 1,460
103
Capital Instruments Main Features
Triodos Bank has issued two capital instruments:
1. Shares
2. Subordinated liability
The main features are:
Ad 1. Shares
Issuer Triodos Bank NV
Unique identifier Not applicable. The shares have not been listed onany securities exchange
Governing law(s) Dutch law
Regulatory treatment:
Transitional CRR rules Common Equity Tier 1
Post-transitional CRR rules Common Equity Tier 1
Eligible at solo/(sub-)consolidated/solo&(sub-)consolidated
Solo and Consolidated
Instrument type Ordinary shares
Amount recognised in regulatory capital (Currency inmillion, as of most recent reporting date)
€ 720.8. For a specification see the solvency chapteron page 108.
Nominal amount of instrument The nominal amount per share is EUR 50. At reportingdate 9,686,584 shares were issued and fully paid upso that the total nominal amount is EUR 484.3.
Issue price The Shares will be issued continuously. The issueprice of shares will be determined daily by TriodosBank on the basis of a fixed calculation model thatcalculates the actual net asset value of Triodos Bank(the NAV) divided by the number of issued shares (theNAV per share). The NAV is equal to the book value ofthe assets of Triodos Bank minus the book value ofthe liabilities of Triodos Bank. The Issue Price pershare will be rounded to whole euros, whereby valuesof 0.5 euros or more are rounded up.
Redemption price Not applicable
Accounting classification Shareholders equity
Original date of issuance Triodos Bank N.V. was founded as a public limitedcompany under Dutch law by deed of 30 June 1980.The issuance of shares started from that date.
Perpetual or dated Perpetual
Original maturity date No maturity
Issuer call subject to prior supervisory approval Yes
Optional call date, contingent call dates andredemption amount
Not applicable
Subsequent call dates, if applicable Not applicable
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Coupons / dividends
Fixed or floating dividend/coupon Floating dividend
Coupon rate and any related index Part of the profit as reported in the adopted profit andloss account shall be used by the Executive Board toform or to add the reserves to the extent that isdeemed desirable by the Executive Board. Anyremaining profit shall be distributed to theshareholders, unless the General Meeting decidesotherwise. The General Meeting may at any time andfor any reason decide to cancel dividends. Theintention of the Statutory Directors is to have a stabledividend distribution per share.
Existence of a dividend stopper No
Fully discretionary, partially discretionary ormandatory (in terms of timing)
Fully discretionary
Fully discretionary, partially discretionary ormandatory (in terms of amount)
Fully discretionary
Existence of step up or other incentive to redeem No
Noncumulative or cumulative Noncumulative
Convertible or non-convertible Non-convertible
If convertible, conversion trigger(s) Not applicable
If convertible, fully or partially Not applicable
If convertible, conversion rate Not applicable
If convertible, mandatory or optional conversion Not applicable
If convertible, specify instrument type convertible into Not applicable
If convertible, specify issuer of instrument it convertsinto
Not applicable
Write-down features No
If write-down, write-down trigger(s) Not applicable
If write-down, full or partial Not applicable
If write-down, permanent or temporary Not applicable
If temporary write-down, description of write-upmechanism
Not applicable
Position in subordination hierarchy in liquidation(specify instrument type immediately senior toinstrument)
The shares are immediately subordinate to theSubordinated liability.
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Ad 2. Subordinated liability
Issuer Triodos Bank NV
Unique identifier ISIN code NL0000686491.
Governing law(s) Dutch law
Regulatory treatment:
Transitional CRR rules Tier 2 capital
Post-transitional CRR rules Tier 2 capital
Eligible at solo/(sub-)consolidated/solo&(sub-)consolidated
Solo and Consolidated
Instrument type Bond
Amount recognised in regulatory capital (Currency inmillion, as of most recent reporting date)
€ 0.6. For a specification see the solvency chapter onpage 108.
Nominal amount of instrument EUR 5.25
Issue price 99.314%
Redemption price Not applicable
Accounting classification Liability – amortised cost
Original date of issuance 12.Jul.06
Perpetual or dated Dated
Original maturity date 12.Jul.16
Issuer call subject to prior supervisory approval Yes
Optional call date, contingent call dates andredemption amount
Not applicable
Subsequent call dates, if applicable Not applicable
Coupons / dividends
Fixed or floating dividend/coupon Fixed
Coupon rate and any related index 5.625%
Existence of a dividend stopper No
Fully discretionary, partially discretionary ormandatory (in terms of timing)
Mandatory
Fully discretionary, partially discretionary ormandatory (in terms of amount)
Mandatory
Existence of step up or other incentive to redeem No
Noncumulative or cumulative Cumulative
Convertible or non-convertible Non-convertible
If convertible, conversion trigger(s) Not applicable
If convertible, fully or partially Not applicable
If convertible, conversion rate Not applicable
If convertible, mandatory or optional conversion Not applicable
If convertible, specify instrument type convertible into Not applicable
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If convertible, specify issuer of instrument it convertsinto
Not applicable
Write-down features No
If write-down, write-down trigger(s) Not applicable
If write-down, full or partial Not applicable
If write-down, permanent or temporary Not applicable
If temporary write-down, description of write-upmechanism
Not applicable
Position in subordination hierarchy in liquidation(specify instrument type immediately senior toinstrument)
The Subordinated liability is immediate subordinatedto the claims of depositors and the unsubordinatedclaims with respect to the repayment of borrowedmoney.
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Solvencyin thousands of EUR
The calculation of the common equity Tier 1 ratio and the total capital ratio is based on the reportingrequirement under the Capital Requirement Directive (CRD) and Capital Requirement Regulation (CRR) knownas at reporting date.
2015 2015 2014 2014
Amount atdisclosure
date
Amounts subjectto pre-regulation(EU) no 575/2013
treatmentor prescribed
Residual amountof regulation (eu)
no 575/2013
Amount atdisclosure
date
Amounts subjectto pre-regulation(EU) no 575/2013
treatmentor prescribed
Residual amountof regulation (eu)
no 575/2013
Capital instruments and the related sharepremium accounts of which: ordinary shares 608,264 568,643
Retained earnings1) – –
Accumulated other comprehensive income(and other reserves, to include unrealisedgains and losses under the applicableaccounting standards) 131,526 104,857
Independently reviewed interim profits net ofany foreseeable charge or dividend1) – –
Common Equity Tier 1 (CET1) capital beforeregulatory adjustments 739,790 673,500
Intangible assets (net of related tax liability) –17,134 – –12,209 –
Deferred tax assets that rely on futureprofitability excluding those arising fromtemporary differences (net of related taxliability where the conditions in Article 38 (3)are met) –2,779 –4,169 –1,274 –5,097
Regulatory adjustments applied to CommonEquity Tier 1 in respect of amounts subject topre-CRR treatment
Regulatory adjustments relating tounrealised gains and losses pursuant toArticles 467 and 468 –302 –390
Of which: filter for unrealised gain onparticipation interest –302 –201 –390 –
Total regulatory adjustments to Commonequity Tier 1 (CET1) –20,215 –13,873
Common Equity Tier 1 (CET1) capital 719,575 659,627
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Additional Tier 1 (AT1) capital – –
Tier 1 capital (T1 = CET1 + AT1) 719,575 659,627
Tier 2 (T2) capital: instruments andprovisions
Capital instruments and the related sharepremium accounts2) 557 1,604
Tier 2 (T2) capital before regulatoryadjustments 557 1,604
Tier 2 (T2) capital 557 1,604
Total capital (TC = T1 + T2) 720,132 661,231
Risk weighted assets in respect of amountssubject to pre-CRR treatment andtransitional treatments subject to phase outas prescribed in Regulation (EU) No 575/2013(i.e. CRR residual amounts) 3,786,145 3,471,180
Total risk weighted assets 3,786,145 3,471,180
Capital ratios and buffers
Common Equity Tier 1 (as a percentage of riskexposure amount)3) 19.01% 19.00%
Tier 1 (as a percentage of risk exposureamount)4) 19.01% 19.00%
Total capital (as a percentage of riskexposure amount) 19.02% 19.05%
Institution specific buffer requirement (CET1requirement in accordance with article 92 (1)(a) plus capital conservation andcountercyclical buffer requirements, plussystemic risk buffer, plus the systemicallyimportant institution buffer (G-SII or O-SIIbuffer), expressed as a percentage of riskexposure mount) 2.50% 2.50%
of which: capital conservation bufferrequirement 2.50% 2.50%
of which: countercyclical buffer requirement 0% 0%
of which: systemic risk buffer requirement 0% 0%
of which: Global Systemically ImportantInstitution (G-SII) or Other SystemicallyImportant Institution (O-SII) buffer 0% 0%
Common Equity Tier 1 available to meetbuffers (as a percentage of risk exposureamount) 16.51% 16.50%
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Amounts below the thresholds for deduction (before risk weighting)
Direct and indirect holdings of the capital offinancial sector entities where the institutiondoes not have a significant investment inthose entities (amount below 10% thresholdand net of eligible short positions) 3,374 3,137
Direct and indirect holdings by the institutionof the CET 1 instruments of financial sectorentities where the institution has asignificant investment in those entities(amount below 10% threshold and net ofeligible short positions) 5,809 5,083
Deferred tax assets arising from temporarydifferences (amount below 10% threshold,net of related tax liability where theconditions in Article 38 (3) are met) 1,096 779
1 Retained earnings are according the CRR recognised in the Tier 1 capital after a formal decision confirming the finalprofit or loss of the institution for the year or with the prior permission of the competent authority.
2 These are Subordinated liabilities which are weighted for 10.6% (2014: 30.6%) in the capital, due to the maturity which isshorter than 5 years.
3 The Dutch Central Bank stated that the Common Equity Tier 1 ratio must be at least 4.5%.4 The Dutch Central Bank stated that the Tier 1 ratio must be at least 6.0%.
The risk weighted assets can be specified as follows:
2015 2014
Risk weighted exposure amount for credit risk 3,423,679 3,146,379
Risk exposure amount for market risk – –
Risk exposure amount for operational risk 353,028 315,514
Risk exposure amount for credit valuation adjustment 9,438 9,288
Total risk weighted assets 3,786,145 3,471,180
The risk weighted exposure amount for credit risk can be specified as follows:
2015 2014
Risk-weighted assets 3,103,020 2,865,853
Risk-weighted off-balance sheet items 277,521 241,496
Risk-weighted derivatives 43,138 39,030
Risk weighted exposure amount for credit risk 3,423,679 3,146,379
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The Risk exposure amount for market risk exclusively concerns exchange rate risk in the case of Triodos Bank.The capital requirement is 8% of the net open foreign currency position if the net open foreign currency positionis more than 2% of the actual total capital. The capital requirement is zero if the net open foreign currencyposition is less than 2% of the actual total capital.
2015 2014
Bottom line of 2% of the actual total capital 14,403 13,225
Net open foreign currency position 10,282 8,088
Capital requirement percentage 0% 0%
Capital requirement amount for market risk (m) – –
Risk exposure amount for market risk (m/8%) – –
The capital requirement for operational risk is 15% of the average income of the previous three years.
2015 2014
Total income 2012 n/a 151,566
Total income 2013 163,665 163,665
Total income 2014 189,591 189,591
Total income 2015 211,589 n/a
Average income previous three years 188,282 168,274
Capital requirement percentage 15% 15%
Capital requirement amount for operational risk (cror) 28,242 25,241
Risk exposure amount for operational risk (cror/8%) 353,028 315,514
Risk exposure amount for credit valuation adjustment concerns an adjustment to the mid-market valuation ofthe OTC derivative portfolio of transactions with a counterparty.
2015 2014
Capital charge according the standardised method 755 743
Risk exposure amount for credit valuation adjustment (capital charge/8%) 9,438 9,288
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Leverage Ratioin thousands of EUR
The calculation of the leverage ratio is based on the reporting requirement under the Capital RequirementDirective (CRD) and Capital Requirement Regulation (CRR) known as at reporting date.
2015 2014
Summary reconciliation of accounting assets and leverage ratioexposures
Total assets as per published financial statements 8,991,883 7,808,435
Adjustment for entities which are consolidated for accounting purposesbut are outside the scope of regulatory consolidation – –
Adjustment for fiduciary assets recognised on the balance sheetpursuant to the applicable accounting framework but excluded from theleverage ratio exposure measure according to article 429(11) ofRegulation (EU) NO, 575/2013 – –
Adjustment for derivative financial instruments 13,723 16,499
Adjustment for securities financial transactions – –
Adjustment for off-balance sheet items (ie conversion to creditequivalent amounts of off-balance sheet exposures) –411,207 –337,521
Other adjustments –21,673 –16,159
Leverage ratio exposure 8,572,726 7,471,254
On Balance sheet items (excluding derivatives and securities financingtransactions, but including collateral)
On Balance sheet items (excluding derivatives and securities financingtransactions, but including collateral) 8,171,152 7,119,669
Asset amounts deducted in determining Tier 1 capital –20,215 –13,873
Total on balance sheet exposure (excluding derivatives and securitiesfinancing transactions) (d) 8,150,937 7,105,796
derivates exposures
Replacement cost (mark to market-method) 38,809 30,449
Add-on amount for potential future exposure (mark to market-method) 13,455 16,499
Total derivatives exposure (e) 52,264 46,948
Off balance sheet exposures
Off balance sheet exposures at gross notional amount 780,732 656,031
Adjustment for conversion to credit equivalent amounts –411,207 –337,521
Total off balance sheet exposure (f) 369,525 318,510
Tier 1 capital (c) 719,575 659,627
Total exposure (g) (d+e+f) 8,572,726 7,471,254
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2015 2014
Leverage ratio ultimo year (c/g) 8.4% 8.8%
Total on balance sheet exposures (excluding derivatives and securitiesfinancing transactions), of which: 8,171,152 7,119,669
Trading book exposures – –
Banking book exposures, of which: 8,171,152 7,119,669
Covered bonds – –
Exposures treated as sovereigns 3,420,800 2,814,285
Exposures to regional governments, MDB, international organisationsand PSE not treated as soevereings 59,191 59,240
Institutions 627,344 675,703
Secured by mortgages of immovable properties 1,378,113 1,126,228
Retail exposures 238,025 202,245
Corporate 2,164,956 1,959,307
Exposures in default 152,517 186,352
Other exposures (eg equity, securisations and other non-creditobligation assets) 130,206 96,309
The leverage ratio is calculated using the transitional definition of the tier 1 capital.
The leverage ratio is 8.4% (2014: 8.8%) using the fully phased-in definition of the tier 1 capital.
Management of excessive leverageThe risk of excessive leverage is managed inclusively in our capital management. We aim for a strong capitalbase, reducing this risk.
At the end of 2015 the leverage ratio is 8.4% (2014: 8.8%). The leverage ratio was mainly affected by growth ofthe on-balance positions and growth of equity. The effect of the implementation of the Capital RequirementsRegulation had a limited effect on the leverage ratio, therefore the outcome is stable.
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Risk Management
Purpose and organisation
Objective
The aim of Triodos Bank’s risk management activities is to ensure the long term resilience of the business. Theseactivities create an environment in which Triodos Bank can pursue its mission to its fullest potential in a safeway. Risk management provides the structural means to identify, prioritise and manage the risks inherent in itsbusiness activities. The intention is to embed risk management in such a way that it fits the complexity and sizeof the organisation and is designed to also allow future growth. In order to ensure that such an environment canexist and prosper, a Risk Governance Framework has been put in place which underpins the risk processes.
The Three Lines of Defense
Triodos Bank manages its business using a Three Lines of Defense Model. This approach ensures that each co-worker is fully aware of their responsibilities in the management of risk, irrespective of whether their role is in acommercial, policy-making or control function. The model ensures that responsibilities are properly aligned andmakes clear that all co-workers have a role to play in managing risk.
First line functions are Triodos Bank’s branches, business units and departments, which are responsible formanaging the risks of their operations. Second line functions are located in the bank branches, business unitsand departments, and ensure that risks are appropriately identified and managed. Second line functions arealso established at the Head Office. They create and maintain the corporate Risk Governance Framework, andthe policies and procedures which provide the boundaries for the local and consolidated business activities.
The third line of defense is the Internal Audit function providing independent and objective assurance of TriodosBank’s corporate governance, internal controls, compliance and risk management systems. This includes theeffectiveness and efficiency of the internal controls in the first and second lines of defense.
Risk organisation
In light of Triodos Bank’s growth, the impact of all new regulations, and the increased attention of supervisoryauthorities, Triodos Bank has made an important step up in its risk management organisation during the pastyears. The Director Risk and Compliance (CRO) is taking full responsibility for all the second line riskmanagement and compliance activities, and reports directly to the Chief Financial Officer and its activities aresupervised by the Audit and Risk Committee of the Supervisory Board.
The structure of the risk organisation meets banking industry standards and covers all relevant risks for TriodosBank within the three following risk categories: Enterprise Risks, Financial Risks and Non-Financial Risks. Eachrisk type covers a number of risk categories (see diagram on the next page).
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The current governance structure of Triodos Bank facilitates the Executive Board to delegate decision-makingauthority to the following risk committees at a central level:• For Financial Risk, the Central Credit Committee has authority to take decisions on credit risks, both on anindividual debtor level and on a credit portfolio level; the Asset & Liability Committee has authority to decide onmarket risks and liquidity risk;• For Non-financial Risk, the Non-Financial Risk Committee has authority to decide on operational andcompliance risk matters. This committee also functions as the Product Approval Committee for new products;and• For Enterprise Risk, the Enterprise Risk Committee has authority to decide on strategic, business andreputational risk issues.
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Each committee is chaired by an Executive Board member to ensure consistent decision making on materialrisks within Triodos Bank’s wider strategy.
Branches also have a decision-making committee for their lending activities: the Local Credit Committee. Thislocal credit committee decides on loans under the responsibility of the local Managing Director within delegatedcredit approval limits. This committee also monitors the credit risks of the local credit portfolio and monitorsalignment with relevant credit risk policies.
The Supervisory Board’s Audit and Risk Committee supervises the activities of the Executive Board with respectto the operation and adequacy of internal risk management and control systems. The CRO reports to theExecutive Board and has an escalation line to the Chair of the Audit & Risk Committee (that supports theindependency of the Risk Control Function as countervailing power to the business).
Enterprise RiskThe Enterprise Risk discipline synthesises all the risks using input from all risk areas, and performs analyses todetermine at a strategic level which larger trends can potentially influence Triodos Bank’s risk profile. TriodosBank manages Enterprise Risk through a risk management cycle: performing strategic risk assessments,determining the risk appetite, assessing capital and liquidity requirements, and monitoring the risk profilethrough periodic enterprise risk management reporting.
Strategic Risk
Strategic Risks are those that potentially have the most impact on an organisation’s ability to execute itsstrategies and achieve its business objectives. Therefore Strategic Risk Assessments are performed atExecutive Board level for Triodos Bank as a whole and at Managing Director level for each business unit, everythree years, with an annual update.
Triodos Bank considers its basic banking model to have a low risk profile. As a traditional retail bank, it earns itsincome from the transformation of interest and liquidity maturity of money and taking credit risks. Volume is animportant factor in generating a healthy income. In addition, the following elements play an important role: thebalancing of assets and liabilities, the capacity to set an adequate price for those assets and liabilities andother banking services. Cost control is also crucial to maintaining operational profit.
Strategic risks need to be carefully managed to realise integrated financial and mission-driven objectives.
The corporate and local risk sensitivities are used to determine scenarios that are used to test Triodos Bank’scapital, liquidity, profitability and operational stability during the year.
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Risk Appetite
A risk appetite process is implemented across Triodos Bank to align its risk profile with the willingness to takerisk in delivering its business objectives. The Risk Appetite Statement reflects the actual implementation of theRisk Appetite Framework. It is updated yearly and is approved by the Supervisory Board upon advise by theAudit and Risk Committee. The concept of risk appetite and the link to the Strategy and Business objectives isillustrated below:
Overview of risk capacity, risk appetite, risk limits and the relationship with Triodos Bank’s risk profile.
Triodos Bank uses a set of indicators and limits to measure and assess the level of risk appetite and risk profileof the organisation. The risk limits, determined at corporate level, are translated into a localised limit structurefor each branch. This local limit structure, or ‘cascaded’ limits structure, is being developed for all risk types.
The risk appetite is based on three objectives that fit with Triodos’ corporate goals and guarantee a sustainablebanking model. They are to (1) protect identity and reputation, (2) maintain healthy balance sheet relations and(3) maintain stable growth.
Recovery
The Recovery Plan specifies measures Triodos Bank can take in order to survive a severe crisis that impacts itscapital position, liquidity, profitability and operational stability. The aim of a recovery plan is to be prepared for acrisis and therefore to lower the probability of the organisation defaulting. It also aims to identify and quantifythe effectiveness of corrective measures which are taken in different scenarios.
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Enterprise Risk Reporting
Every risk discipline reports on a monthly basis (e.g. Non Financial Risk Report, ALM Report and BusinessBanking Loan Report) or on a quarterly basis (e.g. Compliance Report). These reports are discussed incorresponding committees, and correction measures are taken whenever needed. On a quarterly basis, they areintegrated in the Enterprise Risk Management (ERM) report which provides insights into the Triodos Bank riskprofile in relation to its accepted risk appetite. The objective of the ERM report is to create a single point ofreference for all risk related activities within Triodos Bank. The ERM report also provides insights into specificrisk themes and provides an integrated picture of risk at corporate level. This report is discussed in theEnterprise Risk Committee and shared with the Audit and Risk Committee and Supervisory Board.
Business Risk
Triodos Bank defines business risk as the risk caused by changes in external factors like competitiverelationships, stakeholders, reputation and business climate. Strategic risk is caused by internal factors withinthe organisation. Business risk arises outside of the organisation. Given that both risks can affect theorganisation’s ability to achieve its overall objectives, they are managed together as described under strategicrisk.
Reputational Risk
Triodos Bank defines Reputational Risk as the risk that its market position deteriorates due to a negativeperception among customers, counterparties, shareholders and/or regulatory authorities. Triodos Banksafeguards reputational risk in other risk disciplines as in most cases it is a consequence of other risk eventshappening. It also works with a transparent and stable business model with solid ratios, mitigating this risk.
Reputational Risk has a special dimension for Triodos Bank which relates to its mission and values, and areessential to achieving its objectives. In this sense, the exposure of Triodos Bank to reputational risk depends onthe ability of management and co-workers to act consciously in accordance with the mission and values. Forthis reason, Triodos Bank has a very proactive human resources approach aimed to ensure the connection of allco-workers with the mission and values. In addition, Triodos Bank actively manages its engagement with thepublic and its clients, for example, via an online social media policy and management of complaints.
Financial RiskFinancial risk is an umbrella term for multiple types of risk associated with financing the balance sheet. Tomanage this, financial risk is subdivided in three categories: credit risk, market risk and liquidity risk.
Credit Risk
Credit Risk loan book
Triodos Bank manages its Credit Risk at a client and at a portfolio level. It operates within a pre-defined set ofcriteria for accepting credits. Credits are extended within the target markets and lending strategy in accordancewith Triodos Bank’s mission and expertise. Before accepting a credit facility, Triodos Bank makes an assessmentof the customer’s risk profile, cash flows, available collateral and the requested transaction, including anassessment of the integrity and reputation of the borrowers or counterparty. Compliance analysis with TriodosLending Criteria is an integral part of each credit proposal.
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Obligor Risk
An obligor is a single legal entity that commits to the terms and conditions of a loan agreement. The obligor isthoroughly analysed from meeting Triodos Bank’s lending criteria to its capacity to repay a loan. The risk relatedto the obligor is that it fails to meet its contractual obligations. Obligors are rated through an internal ratingmethodology system.
A thorough assessment of each obligor and the structure of their loan is made before any loan is provided. Areview of approved credit is made once a year at a minimum to assess the evolution of the client’s capacity tomeet its obligations. The high quality of securities (collateral) against outstanding loans reduces credit risk.Principal collateral are for example: mortgage registrations for business or private properties, securities frompublic authorities, companies or private individuals, and rights of lien on movables, such as office equipment,inventories, receivables and/or contracts for projects.
Triodos Bank aims to finance specific projects and objects that are in line with the bank’s mission. Whenfinancing a project, the bank has a pledge on the underlying contracts. For the financing of objects, the bankwill take a pledge or mortgage on the specific object. The bank applies haircuts, in all cases, on the marketvalue. The level of this haircut will depend on the marketability of the asset in a negative scenario. This allowsTriodos Bank to make a proper assessment of the overall risk of the loan and the value of the asset in case of adownturn. The value of the collateral is reviewed on a yearly basis and for large loans with a mortgage, anexternal valuation by an expert will be requested at a minimum every three years.
Triodos Bank has an early warning system that helps identify problem loans early, to allow for more availableoptions and remedial measures. Once a loan is identified as being in default (unlikelyness to pay or overduepayments beyond 90 days), it is managed under a dedicated remedial process, with a focus on full recovery.
Group Exposures
The risk related to a Group is that if one obligor fails to meet its contractual obligations, so will the remainingobligors within the Group . A group is defined as two or more obligors that are interrelated in such a way thatthey are considered as a single risk.
Each obligor of the Group, and the Group as a whole, are analysed on all aspects, from meeting Triodos Bank’slending criteria and to their capacity to repay the loan.
Concentration Risk loan book
Loans are provided to businesses and projects that contribute to achieving Triodos Bank’s mission. Given thatthis involves a small number of sustainable sectors, a certain level of sector concentration is inherent to theloan portfolio. Concentration in the existing sectors is acceptable as Triodos Bank has considerable expertise inthese sectors and actively invests in further increasing its knowledge.
A diversified credit risk portfolio is the result of assets spread over many debtors, sectors and geographies thatare not interrelated. In order to manage concentration risks and face an economic downturn with confidence,Triodos Bank maintains a set of limits. It measures and limits the following concentration risks in its lendingactivities: obligor exposures; group exposures; top 20 exposures (excluding central and lower governmentexposures); government exposures; exposures at sector per country; mortgage exposures; and countryexposures.
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Besides lending activities, Triodos Bank has established limits related to the investment portfolio concerningcentral banks, governments, supranational institutions and banks and financial institutions. These limits arederived from the risk appetite framework and aim to keep concentration risk at an acceptable level.
From a regulatory perspective, single exposures to a debtor or a group may never exceed 25% of the Actual OwnFunds. Loans in excess of 10% of the Actual Own Funds require special reporting to the supervisory authority.
Triodos Bank has in its loanbook no loans to a debtor or group exceeding 10% of the Actual Own Funds. (Limitsof the investment portfolio are described in the relevant chapters.)
Sector concentrations
Triodos Bank is active in well defined sectors where it has extensive expertise and which are in line with itsmission. It has set limits on sectors, based on Actual Own Funds, at group and branch level. Sector studies haveshown relatively low correlations of risk drivers in sectors that Triodos Bank finances in multiple countries.
At group level, Triodos Bank divides the sector concentration limits in different levels. Specific limits for eachsector per country are set by the Executive Board within these levels, taking into account the specific risks ofeach sector and country.
Larger sectors are strategic for Triodos Bank. These are well distributed across branches (and countries) andhave an overall low risk profile that justifies a higher consolidated concentration. Sector analyses are performedon an annual basis and are presented to the Central Credit Committee to be able to respond swiftly todevelopments that may affect the risk profile of the portfolio. Central Credit Risk can request sector updates atshorter intervals if there is a change to a sector risk profile.
Sector limits are approved on the basis of thorough annual sector analyses demonstrating an in depthknowledge of the sector and Triodos Bank’s track record.
EU’s “20-20-20” targets have been set for increasing the share of renewables and reducing CO2 missions: By theyear 2020, across the EU, CO2 emissions are to be reduced by 20% of the 1990 level, energy demand is to be cutby 20%, and renewables are to cover 20% of the total consumption. Triodos Bank has a diversified renewableenergy portfolio in terms of geography and technology and derives comfort as to the future of this sector in viewof the ambitious EU targets.
Country concentrations
Triodos Bank is a European bank, acting under the European Banking Directive since 1993, with branches in fivecountries (The Netherlands, Belgium, United Kingdom, Spain and Germany) and with additional exposuresamongst others in France and Ireland.
Triodos Bank does not set any country limits for the countries it operates in as long as these countries have acredit rating of AA- or better. Specific limits are defined for countries with a credit rating of A+ or lower.
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Bad debts and loan loss provisions
All business loans in the portfolio are periodically reviewed on an individual basis. Their frequency depends onthe debtor’s creditworthiness, the degree of market exposure and the market in which the debtor operates.Private loans are reviewed at portfolio level, and on individual basis if appropriate. The credit committee of abranch discusses and, if necessary, takes action with respect to overdue payments from debtors. If there is anydoubt regarding the continuity of the debtor’s core operations and/or a debtor fails to settle agreed interest andrepayment instalments for a prolonged period, this debtor falls under the category of doubtful debtors and willbe managed intensively.
Provisions for loan losses are taken for doubtful debtors at an individual level based on the difference betweenthe total amount of the debtor’s outstanding liability to Triodos Bank and the future expected cash flows,discounted at the original effective interest rate of the contract. These individual provisions include provisionsfor concessions or refinancing given to debtors who face financial difficulties. They are only granted to thedebtor in question in order to overcome their difficulties in these exceptional circumstances. These aredescribed as forbearance measures.
A general provision has been taken for Incurred But Not Reported bad debts (the IBNR) to cover the time lagbetween the event that prompts the debt to qualify as doubtful and the moment that fact is known to TriodosBank. This is a generic provision and is based on statistics. Triodos Bank applies a fraction of the Expected Lossto calculate the IBNR. In 2015 this fraction has been revieved against the bank's portfolio experience andbroader market practice. This has resulted in an increase of the IBNR.
In 2015, the net additions to the provision for doubtful debts, as a percentage of the average loan portfolio, was0.16% (2014: 0.28%). The total of provisions related to the outstanding credits is 1.3% (2014: 1.6%) as at the endof the year.
The credit risk in the loan portfolio is reported each month to the Central Credit Committee, and quarterly to theAudit and Risk Committee
Bad debts and past due receivables
The following tables provide an overview of the bad debts and past due receivables per sector and country.
Bad debts are impaired loans that Triodos Bank expects will not be fully repaid, in accordance with the originalloan contract. Provisions for loan losses are taken for doubtful debtors based on the difference between thetotal amount of the debtor’s outstanding liability to Triodos Bank and future expected cash flows, discounted atthe original effective interest rate of the contract. Past due receivables in these tables are loans overdue inexcess of 90 days.
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Movements bad debts
2015 2014
Balance sheet value as at 1 January 189,664 152,692
Classified as bad debt during the year 36,762 59,857
Interest charged on bad loans 3,924 3,810
Release of bad loans / transfer to not impaired –18,740 –4,655
Bad loans written off –13,089 –6,803
Repayments –13,138 –16,123
Exchange rate result 866 886
Balance sheet value as at 31 December 186,249 189,664
Bad debts and past due receivables per sector
2015Bad debts
at year end
Provision forBad debts at
year end
Valueadjustments
in the year
Past duereceivables (excl.
Bad debts) atyear end
Basic materials 12,673 2,432 324 –
Consumer products (non-food) 278 131 –23 –
Retail 1,018 432 23 6
Services 31,115 4,146 –215 1,123
Healthcare and social work 31,460 4,994 1,466 2,362
Agriculture and fishing 21,637 10,172 –2 9,795
Media 7,047 354 –331 322
Utilities 21,777 18,605 –660 2,703
Private individuals 940 127 126 18
Leisure and tourism 28,672 10,213 2,473 535
Transport & logistics – – – 55
Real Estate 3,839 1,191 667 1
Food and beverages 7,172 6,165 1,609 1,414
Other sectors 18,621 9,089 2,122 4,656
Total 186,249 68,051 7,579 22,990
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2014Bad debts
at year end
Provision forBad debts at
year end
Valueadjustments
in the year
Past duereceivables (excl.
Bad debts) atyear end
Basic materials 13,121 1,836 833 54
Consumer products (non-food) 379 154 87 –
Retail 1,342 570 140 2
Services 28,623 4,784 1,144 1,978
Healthcare and social work 40,628 8,399 678 4,468
Agriculture and fishing 21,330 10,368 5,743 9,742
Media 2,059 737 –73 2,685
Utilities 27,685 22,375 696 2,718
Private individuals 1 1 1 1
Leisure and tourism 29,575 8,071 –454 537
Transport & logistics – – – 102
Real Estate 1,243 550 415 195
Food and beverages 8,674 5,203 1,513 1,609
Other sectors 15,004 4,666 370 1,001
Total 189,664 67,714 11,093 25,092
Bad debts and past due receivables per country
2015Bad debts
at year end
Provision forBad debts at
year end
Valueadjustments
in the year
Past duereceivables (excl.
Bad debts) atyear end
Belgium 10,691 4,223 1,101 73
Germany 7,220 5,091 461 1,105
Ireland 3,247 870 –81 944
The Netherlands 103,471 45,014 3,219 2,260
Spain 47,724 8,515 2,459 12,920
United Kingdom 13,896 4,338 420 5,688
Total 186,249 68,051 7,579 22,990
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2014Bad debts
at year end
Provision forBad debts at
year end
Valueadjustments
in the year
Past duereceivables (excl.
Bad debts) atyear end
Belgium 10,355 3,686 597 485
Germany 12,913 7,537 2,224 949
Ireland 39 41 – 968
The Netherlands 106,030 44,362 5,910 1,399
Spain 47,258 9,028 2,693 15,378
United Kingdom 13,069 3,060 –331 5,913
Total 189,664 67,714 11,093 25,092
Credit risk investment portfolio
Liquidity not invested in loans to customers is invested in deposits, bonds or placed with other banks. TriodosBank’s policy is to invest in the country where it has branches. The Executive Board may deviate from this policy,after consultation with the Asset and Liability Committee. The bond portfolio of Triodos Bank is mainlycomprised of government bonds, and government guaranteed bonds. Triodos Bank also invests in a limitednumber of other types of high grade bonds issued by European (local) governments (in countries where TriodosBank has a branch), European supranational organisations (e.g. European Investment Bank) and FinancialInstitutions.
There are no regulatory restrictions to exposures on governments. Triodos Bank sets limits based on the countryrisk.
There are also no regulatory restrictions to exposures on supranational organisations as far as an institutionhas a credit risk weight of 0%. Triodos Bank has set limits to avoid concentration risk in exposures onsupranational organisations.
Credit risk banks
Banks are selected on the basis of their creditworthiness and screened on their sustainability performance.Exceptions can occur, when the capacity of selected banks in a country is considered not sufficient to placeTriodos Bank’s liquidities using a certain maximum concentration per individual bank. In such cases, depositnotice periods will not exceed three months. All counterparty limits for banks are set by the Central CreditCommittee.
Branches place excess liquidity with the country’s central banks (minimum reserve requirements and depositfacility). There are no regulatory restrictions on exposures to Central Banks.
The Capital Requirements Regulation Large Exposures Regime limits the maximum exposure to a single bank at25% of its Actual Own Funds. To avoid the interbank exposure exceeding the regulatory maximum, Triodos Bankapplies a maximum exposure below the limit based on the Large Exposures Regime. The limits are furthermoreadapted to the external rating of the counterparty and also deposits on banks are limited to a maximummaturity of one year.
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Credit risk related to derivatives
Triodos bank has exposure to credit risk resulting from outstanding Foreign Exchange (FX) contracts (spot,forward and swap transactions) with funds managed by Triodos Investment Management. Triodos Bank servicesthese funds by providing hedges for the foreign exchange risk of these funds’ investments. The risk is mitigatedvia the means of foreign exchange forward and swap contracts.
The total exposure to credit risk resulting from outstanding FX deals per counterparty is the sum of:• Positive market-to-market value of all contracts resulting in a claim by Triodos Bank.• The current market value is calculated per outstanding FX deal. This is done by using current spot and forwardrates at an individual deal level. All the individual outcomes are added resulting in a positive or negative marketvalue. If the market value is positive (for Triodos Bank) it results in a counterparty credit exposure• The potential positive change of that claim in the future resulting from changes in FX rates.• At deal level Triodos Bank calculates the potential change in exposure assuming a normal distribution of FXrate changes based on historical data. The expected FX rate is the latest forward rate at maturity, obtained fromBloomberg. The standard deviation is determined per currency pair (based on historical observations)• Minus existing collateral and netting agreements in place.
A limit is set per counterparty based on the expected amount of outstanding FX transactions and thecorresponding expected exposure, as calculated by the method above. This limit is subject to the overallcounterparty limit Triodos Bank has per counterparty.
Any collateral needed for FX transactions is calculated and managed daily. In the liquidity stress tests theamount of collateral needed for FX transactions is stressed in order to calculate the potential impact on TriodosBank’s liquidity position.
Wrong-way risk is the risk that the exposure to a counterparty is adversely correlated with the credit quality of thatcounterparty. Triodos Bank enters into FX deals with Triodos Investment Funds and these deals are hedged by dealswith a few banks. The FX deals with the Triodos Investment Funds do not cause wrong-way risk as these FX dealshedge the FX risk of the underlying assets of the Investment Funds. In addition, the wrong-way risk of transactionswith banks is mitigated by only using banks with sufficient credit ratings and by collateral agreements in place.
Market Risk
Market risk is the risk of losses arising from movements in market prices. For Triodos Bank this means changesin interest rates and foreign exchange rates in particular.
Foreign exchange risk
Foreign exchange risk is the current or prospective risk to earnings and capital that arises from adversemovements in foreign exchange rates. Triodos Bank’s base currency is the euro. The UK Branch balance sheetand profit and loss account are denominated in sterling (GBP). Exchange rate differences arising fromtranslating the UK Branch balance sheet to euro’s are accounted for as a hedge of a net investment in a foreignbusiness unit and are taken directly to shareholders’ equity in the statutory reserve for conversion differences,insofar as the hedge is effective.
Triodos Bank aims to avoid net currency positions with the exception of those arising from strategicinvestments. The term positions in foreign currencies mainly reflect the currency derivatives of TriodosInvestment Funds which are nearly fully hedged.
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The foreign exchange risk is monitored daily and discussed in the Asset and Liability Committee on a monthlybasis. Limits are agreed by the Asset and Liability Committee.
Foreign currency position
The following table shows Triodos Bank’s foreign currency position in thousands of EUR as at 31 December.
2015
Cashposition
Debit
Cashposition
Credit
Termposition
Debit
Termposition
Credit
Netposition
Debit
Netposition
Credit
GBP 1,155,563 1,153,634 – – 1,929 –
USD 13,492 5,700 381,351 381,351 7,792 –
NOK 104 – – – 104 –
PEN – – 5,947 5,947 – –
DKK – – 5,112 5,112 – –
AUD 875 – – 470 405 –
SEK 52 – – – 52 –
INR – – 26,571 26,571 – –
Total 1,170,086 1,159,334 418,981 419,451 10,282 –
Net open foreign currency position (total of net positions debit and credit): 10,282
2014
Cashposition
Debit
Cashposition
Credit
Termposition
Debit
Termposition
Credit
Netposition
Debit
Netposition
Credit
GBP 980,278 979,373 – – 905 –
USD 10,018 3,377 301,953 301,942 6,652 –
NOK 110 – – – 110 –
PEN – – 8,228 8,228 – –
PHP – – 818 818 – –
DKK – – 3,807 3,807 – –
AUD 843 – – 472 371 –
SEK 50 – – – 50 –
INR – – 15,865 15,865 – –
Total 991,299 982,750 330,671 331,132 8,088 –
Net open foreign currency position (total of net positions debit and credit): 8,088
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Interest rate risk
Interest rate risk is the current or prospective risk that earnings and/or capital are negatively affected byinterest rate changes in the financial markets. This risk is inherent to the traditional banking business and is asource of profitability. However, this does not mean that profits depend solely on successfully taking interestrate risk. Triodos Bank wants to optimise its interest rate risk and focus on its core business – lending to andinvesting in organisations that benefit people and the environment. The objective is a modest risk appetitewhich is reflected by the internal limits.
Risk monitoring
Triodos Bank uses various indicators to measure interest rate risk. The interest rate risk position is monitored bythe Asset and Liability Committee on a monthly basis and reported quarterly to the Executive Board. Interestrate risk is managed with an interest rate risk model using guidelines and limits and by performing variousinterest rate stress scenario analyses. Limits and assumptions are decided upon by the Asset and LiabilityCommittee taking into account Triodos Bank’s risk appetite. The suitability and appropriateness of the limits areassessed on an annual basis. The Asset and Liability Committee will re-evaluate the suitability andappropriateness of the limits if Triodos Bank introduces new products that materially alter its interest rate riskexposure, or if market conditions change in ways that materially alter its exposure to interest rate risk.
Key risk indicators:• Earnings at Risk: a short term indicator which shows the effect of an interest rate shock of plus or minus 2%(200 basis points) on Triodos Bank’s interest income. This is measured over a one year and a two year period.• Economic Value of Equity at Risk: a long term indicator which represents the change of the Economic Value ofEquity (which is the net present value of the future cash flows of all assets and liabilities) in the event of aninterest rate shock of plus or minus 2% (200 basis points).• Outlier Criterion: the Economic Value of Equity at Risk expressed as a percentage of Actual own Funds.• Modified Duration of Equity: an indicator that expresses the sensitivity of the Economic Value of Equity in theevent of interest rate changes.
Assumptions
The interest rate risk depends on (client) behaviour for some products. Behavioural models are used to assessthese products. As a result, Triodos Bank uses both expert judgement and statistical modelling to predictrepricing in various interest rate scenarios.
The level of interest rate risk in savings and current accounts (or non-maturing deposits) is difficult to quantifyin practice since these accounts typically have variable interest rates and no fixed maturity. Triodos Bank maydecide to change rates at any point, if it is prompted to do so by changes in market interest rates. Equally,clients may also withdraw their funds at any point. In practice however, rates are not changed very frequentlyand clients are unlikely to withdraw all their funds instantly. Triodos Bank uses a cash flow based model toanalyse interest rate risk in non-maturing deposits. The objective of this model is to forecast the future outflowof the non-maturing deposits and their sensitivities to market conditions.
For loans, interest rate risk also depends on client pre-payment behaviour. Until recently the volume ofprepayments was not material and client behaviour was not taken into account in assessing interest rate risk.More recently, due to the lower interest rate environment, prepayments are increasing. Therefore, behaviouralassumptions have been developed in the risk model and the level of prepayments will be monitored.
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Risk mitigation
Triodos Bank is able to steer the volume and interest rate terms of client assets and liabilities in order tomaintain the Triodos Bank’s interest rate risk exposure within desired limits. However, changes in client ratesand terms will not be made to the extent that they would materially impair Triodos Bank’s customer service,market position, profitability, capital adequacy and reasonable customer expectations. Triodos Bank alsomanages the duration of liquid marketable investments to maintain its interest rate risk exposure. If necessary,Triodos Bank will use interest rate swap contracts in order to maintain its interest rate risk exposure, withindefined limits.
Overview of interest rate risk indicators used by Triodos Bank as at the end of the year, for all currencies
Base case represents the expected results of Interest Earnings and Economic Value of Equity in an unchangedinterest environment.
2015 Base caseRising interestrate (+200 bp)
Decreasing interestrate (–200 bp)
Amounts in millions in % in %
Actual own Funds € 720
Earnings at Risk 1 year € 151 + € 12 + 7.7% – € 2 –1.2%
Economic Value of Equity at Risk € 913 – € 72 –7.9% – € 42 –4.5%
Outlier Criterion 8.8% 8.8%
Modified Duration of Equity 3.9 5.5 17.6
2014 Base caseRising interestrate (+200 bp)
Decreasing interestrate (–200 bp)
Amounts in millions in % in %
Actual own Funds € 661
Earnings at Risk 1 year € 147 + € 15 + 10.0% – € 2 –1.4%
Economic Value of Equity at Risk € 805 – € 58 –7.2% – € 38 –4.7%
Outlier Criterion 8.8% 8.8%
Modified Duration of Equity 1.3 –0.2 1.8
The calculations for these indicators are based on interest rate maturities. However saving and currentaccounts have a non-defined interest maturity. A quantitative assessment of the interest rate sensitivity ofTriodos Bank’s saving accounts and current accounts has been executed. The outcome of this assessment isused in the calculations for interest rate risk.
The model used for the interest rate risk management of savings and current accounts predicts future volumesand interest rates based on historical data, taking into consideration the statistical significance of that data.The model combines the relationship between client interest rates and market interest rates and outflowpredictions.
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Remaining interest-rate terms of financial instruments
The following table sets out the remaining contractual interest-rate term of the financial instruments held, as at31 December.
2015Floating-
rate<= 3
months<= 1year
<= 5years
> 5years Total
Interest-bearing assets
Cash 285,819 – – – – 285,819
Government paper – 118,900 94,333 – – 213,233
Banks 298,743 245,409 1,000 – – 545,152
Loans 685,508 1,188,481 793,901 1,320,962 1,194,456 5,183,308
Interest-bearing securities – 327,214 225,842 821,523 353,583 1,728,162
Total 1,270,070 1,880,004 1,115,076 2,142,485 1,548,039 7,955,674
Interest-bearing liabilities
Banks – 2,124 7,020 14,967 15,687 39,798
Funds entrusted 36,002 1,291,685 2,004,041 2,565,653 1,372,019 7,269,400
Subordinated liabilities – – 5,241 – – 5,241
Total 36,002 1,293,809 2,016,302 2,580,620 1,387,706 7,314,439
2014Floating-
rate<= 3
months<= 1year
<= 5years
> 5years Total
Interest-bearing assets
Cash 175,225 – – – – 175,225
Government paper – 141,439 67,343 – – 208,782
Banks 184,452 326,791 64,500 – – 575,743
Loans 655,379 708,973 625,270 1,224,649 1,001,885 4,216,156
Interest-bearing securities – 311,322 394,077 634,795 407,621 1,747,815
Total 1,015,056 1,488,525 1,151,190 1,859,444 1,409,506 6,923,721
Interest-bearing liabilities
Banks 5 1,393 10,436 16,840 25,953 54,627
Funds entrusted 16,973 1,142,720 1,697,413 2,191,872 1,224,955 6,273,933
Subordinated liabilities – – – 5,241 – 5,241
Total 16,978 1,144,113 1,707,849 2,213,953 1,250,908 6,333,801
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NoNottes:es:
Only interest bearing assets and liabilities are reported in this table, which results in differences with thebalance sheet figures.
Interest bearing securities and subordinated liabilities are valued at redemption value including bond premiumand after deduction of discounts.
For funds entrusted without a fixed interest rate term, the outcome of the quantitative savings and currentaccount model, as mentioned before, is used.
All other interest-bearing assets and liabilities are reported as floating rates or are broken down in the maturitycalendar by their remaining contractual interest rate term.
Liquidity Risk
Liquidity risk refers to the risk that Triodos Bank is unable to fulfil its payment obligations to its customers andcounterparties at a particular point in time without incurring unacceptable losses.
Customers’ savings and deposits are attracted in order to finance Triodos Bank’s lending operations. Thesurplus is primarily placed with central banks, credit institutions or invested in deposits and bonds. TriodosBank has a strong liquidity position and is funded almost entirely by equity and deposits from private customersand small and medium sized enterprises. As a result, Triodos Bank does not rely on funding from the wholesalemoney and capital markets.
Risk Assessment
A liquidity stress event has a low probability but can have a high impact. Scenario analysis (stress testing) is thetool to quantify Triodos Bank’s vulnerability to liquidity stress events. The Liquidity Contingency Plan and theRecovery Plan describe the main items that should be taken into account in managing the liquidity risk positionof Triodos Bank in a ‘stressed situation’. This includes the indicators and triggers for this stressed situation.Triodos Bank regularly assesses its liquidity position based on stress scenarios. In 2015, the results of thesestress tests were satisfactory.
Internal Liquidity
The Internal Liquidity Adequacy Assessment Process (ILAAP) assesses Triodos Bank’s liquidity adequacy andliquidity management during normal business activities and in times of stress. This process is performed atleast once a year and is submitted to the Dutch Central Bank as part of the Supervisory Review and EvaluationProcess. The ILAAP Report is an internal document. The goal of this report is to properly evaluate the liquidityand funding risks and Triodos Bank’s corresponding liquidity levels and the quality of the liquidity management.
Risk mitigation
The liquidity buffer is the source of funds in case of liquidity needs. It consists of investments with other banksand investments in deposits and bonds. The bond investments are divided into different liquidity classes. Theoptimal size and composition of the liquidity buffer is determined taking into account the risk appetite, balancesheet composition and expected development, strategic plans and short-term funding needs.
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Risk Monitoring
On a daily basis the total liquidity position of Triodos Bank is monitored. On a weekly basis, the detailed liquidityposition in total and at branch level is reported to the Chief Financial Officer. Every month the liquidity ratios arereported to the Asset and Liability Committee.
The Liquidity Coverage Ratio (LCR): to ensure an adequate level of unencumbered, high-quality assets that canbe converted into cash to meet liquidity needs over a 30-day time horizon under an liquidity stress scenariospecified by supervisors.
The Net Stable Funding Ratio (NSFR) indicates the relationship between available longer-term, stable fundingand required longer-term, stable funding resulting from the liquidity profiles of assets and off balance sheetitems. Minimum NSFR standards will be set by 2018.
Asset encumbrance
Assets can be differentiated between assets which are used to support funding or collateral needs(encumbered assets) and assets which are available for potential funding needs (unencumbered assets).
2015
Carryingamount of
encumberedassets
Fair value ofencumbered
assets
Carryingamount of
unencumberedassets
Fair value ofunencumbered
assets
Assets 76,631 8,134,520
Equity instruments – – 65 65
Debt securities 76,631 80,546 1,826,570 1,920,998
Other assets – 6,307,885
2014
Carryingamount of
encumberedassets
Fair value ofencumbered
assets
Carryingamount of
unencumberedassets
Fair value ofunencumbered
assets
Assets 131,750 7,020,654
Equity instruments – – 4 4
Debt securities 81,964 87,202 1,837,443 1,940,203
Other assets 49,786 5,183,207
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2015
Fair value ofencumbered
collateralreceived or owndebt securities
issued
Fair value ofcollateral
received or owndebt securities
issued availablefor
encumbrance
Collateral received by the reporting institution – –
Equity instruments – –
Debt securities – –
Other collateral received – –
Own debt securities issued other than own covered bonds or ABSs – –
2014
Fair value ofencumbered
collateralreceived or owndebt securities
issued
Fair value ofcollateral
received or owndebt securities
issued availablefor
encumbrance
Collateral received by the reporting institution – –
Equity instruments – –
Debt securities – –
Other collateral received – –
Own debt securities issued other than own covered bonds or ABSs – –
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2015
Matchingliabilities,
contingentliabilities or
securities lent
Assets,collateral
received andown debt
securitiesissued other
than coveredbonds and ABSs
encumbered
Carrying amount of selected financial liabilities 84,946 –
2014
Matchingliabilities,
contingentliabilities or
securities lent
Assets,collateral
received andown debt
securitiesissued other
than coveredbonds and ABSs
encumbered
Carrying amount of selected financial liabilities 90,657 –
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Liquidity coverage ratio
Amounts in millions of EUR
2015Total
amount
2015Weighted
amount
2014Total
amount
2014Weighted
amount
Stock of high quality liquid assets:
Total stock of high quality liquid assets 1,664 1,609 1,708 1,641
Total cash outflow 7,672 1,093 6,635 698
Total cash inflow 1,057 736 501 442
Cap on cash inflows 736 523
Net cash outflow 357 256
Liquidity Coverage Ratio 451% 642%
The Net cash outflow must be covered by the stock of High quality liquid assets, so the ratio must be at least100%.
Net Stable Funding Ratio
Amounts in millions of EUR
2015Total
amount
2015Weighted
amount
2014Total
amount
2014Weighted
amount
Total available stable funding 8,130 7,113 7,096 6,219
Total required stable funding 8,953 4,507 7,778 3,774
Net stable funding ratio 158% 165%
The Net Stable Funding Ratio must be more than 100%. This means that the available stable funding mustcover the required stable funding.
Non-financial RiskNon-financials risk includes all the risks faced in Triodos Bank’s regular activities and processes, that are notcategorised as enterprise or financial risk. Triodos Bank has sub-divided this into operational and compliancerisk. Monitoring these risks is particular important to ensure Triodos Bank can continue to offer quality financialservices to its stakeholders.
Operational Risk
In the course of its normal business, Triodos Bank runs operational risks. These risks relate to losses TriodosBank could incur as a result of inadequate or failing internal processes, systems, human behaviour or externalevents. Triodos Bank limits these risks with clear policies, reports and procedures for all business processes.
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The operational risk framework uses several tools and technologies to identify, measure, mitigate and monitorrisks on an operational, tactical and strategic level. During 2015 the operational risk framework was broughtfurther in line with the current scale and complexity of the organisation. Also the Product Approval Policy wasrevised and aligned with new legislation.
Operational Risk Management includes Information Security, Outsourcing and Business Continuity. Activities tomanage risks related to these subjects are executed under the responsibility of the Chief Operating Officer inline with the operational risk framework.
The Non Financial Risk Committee and the Product Approval Committee, where all non financial risks aspectsare discussed including compliance and IT risk, meet on a monthly basis. Numerous control measures havebeen improved and implemented in IT-systems and embedded in procedures and work instructions. Co-workertraining and involvement supports these improvements because, as a learning organisation, people are key tosuccessfully managing operational risks.
Triodos Bank applies a method based on the Basic Indicator Approach for the calculation of the minimumcapital requirements for operational risk.
The operational risk framework follows the principles mentioned in the Sound Practices for the Managementand Supervision of Operational Risk. These sound practices provide guidelines for the qualitativeimplementation of operational risk management and are advised by the Bank of International Settlements.During 2015 no material losses occurred within Triodos Bank as a result of operational risk related events.
Compliance Risk
Triodos Bank defines compliance risk as the risk of legal or regulatory sanctions, material financial loss or lossto reputation that Triodos Bank may suffer as a result of its failure to comply with laws, regulations, rules,related self-regulatory standards, and codes of conducts applicable to its banking activities. Internal policies,procedures and awareness activities are in place to guarantee that co-workers in all functions comply withrelevant laws and regulations.
The compliance function independently monitors and challenges the extent to which Triodos Bank complieswith laws, regulations and internal policies, with an emphasis on customer due diligence, anti-moneylaundering, treating customers fairly, preventing and managing conflicts of interest, data protection and theintegrity of co-workers. Compliance risks are identified, assessed, mitigated, monitored and reported via acompliance risk management cycle. The Central Compliance Department is part of the risk organisation.Compliance Officers are present in every business unit with a functional line towards the Central ComplianceDepartment. Significant compliance risks are reported to the Non-Financial Risk Committee and to theSupervisory Board’s Audit and Risk Committee on a quarterly basis. The Director Risk and Compliance reports toa member of the Executive Board.
There were no significant incidents in 2015 concerning compliance and integrity. Triodos Bank was not involvedin material legal proceedings or sanctions associated with non-compliance with legislation or regulations interms of financial supervision, corruption, advertisements, competition, data protection or product liabilityduring the year.
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Capital ManagementThe objective of Triodos Bank’s capital strategy is to ensure its viability by:• Maintaining sufficient capital to absorb current and future business losses, even in extreme situations(‘stress’);• Adequately allocate capital to its business units; and• Ensuring compliance to all applicable capital legislation and regulation at all times.
Capital adequacy and capital allocation
The total liability capital (equity and subordinated loan) is allocated to business units, in proportion to theeconomic capital, based on their risk profile.
Triodos Bank works with a rolling three year capital forecast. The Asset and Liability Committee monitorsTriodos Bank’s capital position and advises the Executive Board on the capital adequacy. The Asset and LiabilityCommittee also assesses whether available capital is sufficient to support current and future activities on amonthly basis. During 2015 available capital has been at sufficient levels at all times. In 2015 new equity of (net)EUR 40 million was issued to finance Triodos Bank’s further growth. In addition, a retained portion of the 2015profit will be added to the bank’s reserves.
Triodos Bank issued a ten year subordinated loan with an original amount of EUR 22.8 million on 12 July 2006.The contribution of subordinated debt to Triodos Bank’s Tier 2 Capital is not fixed. During the last five remainingyears a subordinated loan is subject to an amortisation scheme. The current remaining par amount of thesubordinated loan is EUR 5.3 million due to buy backs in the last couple of years.
At 31 December 2015 the contribution to Triodos Bank’s Tier 2 capital is EUR 0.6 million, approx. 10% of parvalue.
Regulation
Triodos Bank takes fulfilling its regulatory obligations seriously. It recognises that, alongside the culture of anorganisation, they can play an important role in helping to ensure banks operate appropriately.
Basel III is a worldwide standard for regulation, supervision and risk management of the banking sector,developed by the Basel Committee on Banking Supervision. Basel III has been transposed by the EuropeanUnion into the Capital Requirements Regulation and the Capital Requirements Directive IV. The CapitalRequirements Regulation is directly applicable and the Capital Requirements Directive IV should have beentransposed into local law by each of the members of the European Union. The Capital Requirements Regulationis directly applicable to Triodos Bank, and so is the Dutch implementation of the Capital Requirements DirectiveIV as Triodos Bank is formally domiciled in the Netherlands.
There is no difference in the scope of consolidation for accounting and for prudential reporting purposes. Thereis not any current or foreseen material practical or legal impediment to the prompt transfer of own funds orrepayment of liabilities among Triodos Bank and its consolidated companies.
Internal capital
The capital strategy of Triodos Bank is captured in its Internal Capital Adequacy Assessment Process (‘ICAAP’).The ICAAP covers, for example, the measurement of risks requiring an adequate capital buffer, stress testing,capital contingency and the allocation of available capital to the different Triodos Bank business units and
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departments. The ICAAP is regularly subjected to the Supervisory Review and Evaluation Process (SREP) of theDutch Central Bank.
The actual capital position is stressed regularly based on a number of stress scenarios. A capital contingencyprocess is set up for Triodos Bank in case of a (potential) shortfall in available capital, which can be a threat toits solvency. For this purpose, the Recovery Plan contains measures for restoring its solvency by reducing risksand/or increasing capital base and provides a specific government structure for these stressed conditions.
Capital requirements
Triodos Bank calculates its internal capital adequacy requirements based on regulatory minimum requirements(‘pillar I’), supplemented with additional capital charges (‘pillar II’).
Minimum capital requirements (pillar I)
The total minimum regulatory requirement consists of capital charges for credit risk, operational risk andmarket risk:• Credit Risk – Triodos Bank applies the standardised approach (SA) for calculating its minimum capitalrequirements for credit risk. The risk weighted asset calculations are done for all on-balance sheet exposures(including the loan book and the investment book), and off-balance sheet items (such as loan offers, not yetaccepted) and derivatives exposures;• Operational risk – Based on the size and limited complexity of the Triodos Bank organisation, the basicindicator approach (BIA) is used for calculating the capital requirement for operational risk, which equals 15%of the average over three years of Triodos Bank’s gross income; and• Market risk – The capital charge for Triodos Bank’s market risk is related to its exposure to foreign exchangerisk. The requirement is calculated as the sum of the bank’s overall net foreign exchange position, multiplied by8%. Triodos Bank only accepts limited net foreign exchange positions in strategic investments and in its UKactivities in sterling (GBP). As the net position is very limited and does not exceed the regulatory threshold of 2%of the total own funds, Triodos Bank’s capital charge for market risk is, in reality, zero.• Credit Valuation Adjustment Risk – The capital charge for the counterparty risk of derivative transactions thatare not cleared through a qualified central counterparty.
Detailed calculations of the minimum regulatory capital requirements and ratios are included in the ‘Solvency’chapter on page 108.
Additional capital requirements (pillar II)
In order to determine its economic capital, besides the regulatory capital requirements, Triodos Bank alsocalculates additional capital requirements. These consist of charges for:• Concentration risks in the loan book;• Interest rate risks in the banking book (IRRBB); and• Model risk, related to the calculation of IRRBB. Other risk categories do not depend on sophisticatedmodelling. The following aspects are captured in the calculations for model risk: compliance to regulationaround interest rate risk modelling, statistical uncertainty and data quality.
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External credit rating agencies
In addition to our own opinion, external credit ratings – if available – are used to determine the creditworthiness of the counterparties of our investment portfolio and banks, and for a few corporates. Externalratings are also used for calculating the minimum capital requirement for credit risk under pillar 1.
Credit rating agency used
Exposure class 2015 2014
Central governments and central banks Fitch Fitch
Regional governments and local authorities Fitch Fitch
Public sector entities Moody's Moody's
Multilateral Developments Banks Fitch, Moody's Fitch, Moody's
Institutions Fitch, Moody's Fitch, Moody's
Corporates Fitch, Moody's Fitch, Moody's
2015 1 2 3 4 Grand Total
Sum of net exposure value
Banks 531,666 350,280 181,226 – 1,063,172
Corporates 30,789 45,224 – 5,272 81,285
Grand Total 562,455 395,504 181,226 5,272 1,144,457
2015 1 2 3 4 Grand Total
Sum of fully adjusted exposurevalue
Banks 206,451 351,143 80,029 – 637,623
Corporates 30,789 15,084 – 5,272 51,145
Grand Total 237,240 366,227 80,029 5,272 688,768
2014 1 2 3 4 Grand Total
Sum of net exposure value
Banks 487,968 449,022 107,409 – 1,044,399
Corporates – 15,084 – 2,001 17,085
Grand Total 487,968 464,106 107,409 2,001 1,061,484
138
2014 1 2 3 4 Grand Total
Sum of fully adjusted exposurevalue
Banks 208,862 444,252 29,916 – 683,030
Corporates – 15,084 – 2,001 17,085
Grand Total 208,862 459,336 29,916 2,001 700,115
The table below shows the translation of external ratings from credit rating agencies to the credit quality scale.
Moody's Fitch Credit quality scale
From Aaa to Aa3 From AAA to AA- 1
From A1 to A3 From A+ to A- 2
From Baa1 to Baa3 From BBB+ to BBB- 3
From Ba1 to Ba3 From BB+ to BB- 4
The credit quality scales are translated into risk weighted assets.
Risk weighted value
An overview of the credit risk position within Triodos Bank, based on risk-weighted assets, off-balance sheetitems and derivatives, is given in the following tables which are divided by the following criteria: exposure class,sector and country.
139
Risk-weighted value per exposure class 2015 (asset class)
Average netexposure value
Net exposure valueultimo year
Credit riskmitigation
Fully adjustedexposure value
Risk-weighted
valueRequired capital
for credit risk
Net exposure valuethat is covered by
eligible financialcollateral, and
other eligiblecollateral
Net exposure thatis covered by
guarantees orcredit derivatives
Exposure class:
Central governments and central banks 1,395,723 1,368,787 534,448 1,903,235 – – – –
Regional governments and localauthorities 832,034 1,087,803 310,542 1,398,345 224 18 – –
Public sector entities 59,216 59,191 – 59,191 11,838 947 – –
Multilateral Developments Banks 134,763 138,042 – 138,042 – – – –
Institutions 1,058,171 1,069,370 –430,619 638,751 132,636 10,611 – –431,682
Corporates 2,725,801 2,895,584 –266,387 2,629,197 2,234,607 178,768 –127,982 –266,387
Retail exposures 397,759 416,186 –35,640 380,546 200,336 16,027 –5,668 –35,640
Secured by mortgages on immovableproperty 1,516,457 1,676,873 –110,889 1,565,984 548,233 43,859 –3,351 –110,889
Exposures in default 178,666 159,176 –1,455 157,721 172,111 13,769 –6,003 –1,455
High risk 2,301 4,602 – 4,602 4,747 380 – –
Equity 10,398 12,075 – 12,075 20,789 1,663 – –
Other items 103,422 100,818 – 100,818 98,158 7,852 – –
Total 8,414,711 8,988,507 – 8,988,507 3,423,679 273,894 –143,004 –846,053
Whereof:
Assets 7,646,838 8,155,567 – 8,155,567 3,103,020 248,241 –124,770 –829,231
Off-balance sheet items 718,266 780,676 – 780,676 277,521 22,202 –18,234 –16,822
Derivatives 49,607 52,264 – 52,264 43,138 3,451 – –
Total 8,414,711 8,988,507 – 8,988,507 3,423,679 273,894 –143,004 –846,053
140
Average netexposure value
Net exposure valueultimo year
Credit riskmitigation
Fully adjustedexposure value
Risk-weighted
valueRequired capital
for credit risk
Net exposure valuethat is covered by
eligible financialcollateral, and
other eligiblecollateral
Net exposure thatis covered by
guarantees orcredit derivatives
Exposure class:
Central governments and central banks 1,395,723 1,368,787 534,448 1,903,235 – – – –
Regional governments and localauthorities 832,034 1,087,803 310,542 1,398,345 224 18 – –
Public sector entities 59,216 59,191 – 59,191 11,838 947 – –
Multilateral Developments Banks 134,763 138,042 – 138,042 – – – –
Institutions 1,058,171 1,069,370 –430,619 638,751 132,636 10,611 – –431,682
Corporates 2,725,801 2,895,584 –266,387 2,629,197 2,234,607 178,768 –127,982 –266,387
Retail exposures 397,759 416,186 –35,640 380,546 200,336 16,027 –5,668 –35,640
Secured by mortgages on immovableproperty 1,516,457 1,676,873 –110,889 1,565,984 548,233 43,859 –3,351 –110,889
Exposures in default 178,666 159,176 –1,455 157,721 172,111 13,769 –6,003 –1,455
High risk 2,301 4,602 – 4,602 4,747 380 – –
Equity 10,398 12,075 – 12,075 20,789 1,663 – –
Other items 103,422 100,818 – 100,818 98,158 7,852 – –
Total 8,414,711 8,988,507 – 8,988,507 3,423,679 273,894 –143,004 –846,053
Whereof:
Assets 7,646,838 8,155,567 – 8,155,567 3,103,020 248,241 –124,770 –829,231
Off-balance sheet items 718,266 780,676 – 780,676 277,521 22,202 –18,234 –16,822
Derivatives 49,607 52,264 – 52,264 43,138 3,451 – –
Total 8,414,711 8,988,507 – 8,988,507 3,423,679 273,894 –143,004 –846,053
141
Risk-weighted value per exposure class 2014 (asset class)
Average netexposure value
Net exposure valueultimo year
Credit riskmitigation
Fully adjustedexposure value
Risk-weighted
valueRequired capital
for credit risk
Net exposure valuethat is covered by
eligible financialcollateral, and
other eligiblecollateral
Net exposure thatis covered by
guarantees orcredit derivatives
Exposure class:
Central governments and central banks 1,595,496 1,422,658 474,108 1,896,766 – – – –
Regional governments and localauthorities 369,241 576,264 230,240 806,504 237 19 – –
Public sector entities 59,225 59,240 – 59,240 11,848 948 – –
Multilateral Developments Banks 88,239 131,483 – 131,483 – – – –
Institutions 988,281 1,046,971 –361,370 685,601 137,210 10,977 – –361,671
Corporates 2,518,063 2,556,018 –215,590 2,340,428 2,034,554 162,764 –109,968 –215,590
Retail exposures 269,857 379,332 –39,753 339,579 173,706 13,896 –3,996 –39,753
Secured by mortgages on immovableproperty 1,367,425 1,356,041 –86,837 1,269,204 450,989 36,079 –3,680 –86,837
Past due items 130,194 198,155 –798 197,357 219,167 17,533 –6,441 –797
High risk – – – – – – – –
Equity 4,361 8,721 – 8,721 16,346 1,308 – –
Other items 92,601 106,026 – 106,026 102,322 8,186 – –
Total 7,482,983 7,840,909 – 7,840,909 3,146,379 251,710 –124,085 –704,648
Whereof:
Assets 6,782,734 7,138,107 – 7,138,107 2,865,853 229,268 –113,908 –684,179
Off-balance sheet items 663,648 655,854 – 655,854 241,496 19,320 –10,177 –20,469
Derivatives 36,601 46,948 – 46,948 39,030 3,122 – –
Total 7,482,983 7,840,909 – 7,840,909 3,146,379 251,710 –124,085 –704,648
142
Average netexposure value
Net exposure valueultimo year
Credit riskmitigation
Fully adjustedexposure value
Risk-weighted
valueRequired capital
for credit risk
Net exposure valuethat is covered by
eligible financialcollateral, and
other eligiblecollateral
Net exposure thatis covered by
guarantees orcredit derivatives
Exposure class:
Central governments and central banks 1,595,496 1,422,658 474,108 1,896,766 – – – –
Regional governments and localauthorities 369,241 576,264 230,240 806,504 237 19 – –
Public sector entities 59,225 59,240 – 59,240 11,848 948 – –
Multilateral Developments Banks 88,239 131,483 – 131,483 – – – –
Institutions 988,281 1,046,971 –361,370 685,601 137,210 10,977 – –361,671
Corporates 2,518,063 2,556,018 –215,590 2,340,428 2,034,554 162,764 –109,968 –215,590
Retail exposures 269,857 379,332 –39,753 339,579 173,706 13,896 –3,996 –39,753
Secured by mortgages on immovableproperty 1,367,425 1,356,041 –86,837 1,269,204 450,989 36,079 –3,680 –86,837
Past due items 130,194 198,155 –798 197,357 219,167 17,533 –6,441 –797
High risk – – – – – – – –
Equity 4,361 8,721 – 8,721 16,346 1,308 – –
Other items 92,601 106,026 – 106,026 102,322 8,186 – –
Total 7,482,983 7,840,909 – 7,840,909 3,146,379 251,710 –124,085 –704,648
Whereof:
Assets 6,782,734 7,138,107 – 7,138,107 2,865,853 229,268 –113,908 –684,179
Off-balance sheet items 663,648 655,854 – 655,854 241,496 19,320 –10,177 –20,469
Derivatives 36,601 46,948 – 46,948 39,030 3,122 – –
Total 7,482,983 7,840,909 – 7,840,909 3,146,379 251,710 –124,085 –704,648
143
The net exposure value is a sum of:• Assets excluding intangible assets, excluding discount of subordinated liabilities (included underprepayments and accrued income) and after deducting discount of bonds (included under accruals anddeferred income);• Off-balance sheet items, consisting of contingent liabilities and irrevocable facilities;• Derivatives, valued at the credit risk equivalent, which is based on the additional costs or the lost revenues ofa substitute transaction in the event that the counterparty does not fulfil its obligations.
Credit risk mitigation relates to received collaterals (guarantees and pledged funds entrusted). As a result, thecredit risk shifts from the exposure class of the direct counterparty to the exposure class of the collateralprovider. This results in the fully adjusted exposure value for each exposure class.
The risk-weighted value is calculated by multiplying the fully adjusted exposure value with the risk weight andthe conversion factor. The Capital Requirement Regulation (CRR) state the definition of the exposure classes,the risk weights and conversion factors.
Risk weights depend on the exposure class and the credit rating of the direct counterparty or the collateralprovider. The risk weights per exposure class used by Triodos Bank are in line with CRR rules:• Central governments and central banks: 0%;• Regional governments and local authorities: 0% for Dutch governments, 20% for foreign governments; thepercentage depends on national legislation;• Public sector entities: 20% for Dutch entities, foreign entities 100%;• Institutions: 0% for exposures secured by pledged funds entrusted of Triodos Bank; 20% or 50% for exposuresof or guaranteed by other banks, depending on the original term to maturity of the exposure;• Multilateral Developments Banks: 0% for listed banks, other same as exposure class institutions;• Corporates: 20%, 50%, 100% or 150% for exposures which a credit assesment. 100% for exposures for whicha credit assesment is not available;• Retail exposures: 75%;• Secured by mortgages on immovable property: 35% for exposures secured by residential property, 50% or100% for exposures secured by non residential property;• Exposures in default: 100% for exposures secured by residential property; 100% or 150% for other exposures;the percentage depends on the amount of bad debt provisions that have been formed;• Equity; a significant investment in a financial sector entity 250%, other 100%.• Other items (participating interests, property and equipment and other assets without counterparties): 100%.• Conversion factors only apply to off-balance sheet items. The conversion factors used by Triodos Bank are:• Contingent liabilities: 0.5 or 1.0, depending on the nature of the issued guarantee;• Irrevocable facilities: 0.2 or 0.5, depending on the original term to maturity of the credit facility.
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145
Sector distribution of the exposures 2015 by industry or counterparty type
Centralgovernments
or centralbanks
Regionalgovernments
or localauthorities
Publicsector
entities
MultilateralDevelopment
Banks Institutions Corporates Retail
Secured bymortgages
onimmovable
propertyExposuresin default High risk
Equityexposures
Otherexposures
Totalexposures
Banks and financial intermediation 285,819 – – 138,042 1,069,370 88,084 920 – 4,760 4,602 9,603 – 1,601,200
Basic materials – – – – – 8,649 1,934 2,712 2,932 – – – 16,227
Construction and infrastructure – – – – – 136 91 661 – – – – 888
Consumer products (non-food) – – – – – 190 1,281 1,187 500 – – – 3,158
Retail – – – – – 7,120 3,013 10,111 496 – – – 20,740
Services – – – – – 293,633 16,392 175,325 20,189 – 2,472 – 508,011
Healthcare and social work – – – – – 165,981 41,578 233,447 25,932 – – – 466,938
Agriculture and fishing – – – – – 25,117 15,080 85,146 24,185 – – – 149,528
Media – – – – – 37,588 12,395 1,397 8,207 – – – 59,587
Utilities – – 8,750 – – 1,343,900 13,777 5,121 6,144 – – – 1,377,692
Public Administration 1,082,968 854,673 – – – – – – – – – – 1,937,641
Private individuals – – – – – 794 181,877 503,328 2,079 – – – 688,078
Technology – – – – – – – – – – – – –
Leisure and tourism – – – – – 54,580 12,217 37,239 21,098 – – – 125,134
Transport and logistics – – – – – 73,361 1,525 2,543 100 – – – 77,529
Real estate – – – – – 500,957 29,197 403,653 9,415 – – – 943,222
Insurance and pension funds – – – – – 501 – – – – – – 501
Food and beverages – – – – – 18,318 14,842 32,558 5,845 – – – 71,563
Other sectors – 233,130 50,441 – – 276,675 70,067 182,445 27,294 – – 100,818 940,870
Total 1,368,787 1,087,803 59,191 138,042 1,069,370 2,895,584 416,186 1,676,873 159,176 4,602 12,075 100,818 8,988,507
146
Centralgovernments
or centralbanks
Regionalgovernments
or localauthorities
Publicsector
entities
MultilateralDevelopment
Banks Institutions Corporates Retail
Secured bymortgages
onimmovable
propertyExposuresin default High risk
Equityexposures
Otherexposures
Totalexposures
Banks and financial intermediation 285,819 – – 138,042 1,069,370 88,084 920 – 4,760 4,602 9,603 – 1,601,200
Basic materials – – – – – 8,649 1,934 2,712 2,932 – – – 16,227
Construction and infrastructure – – – – – 136 91 661 – – – – 888
Consumer products (non-food) – – – – – 190 1,281 1,187 500 – – – 3,158
Retail – – – – – 7,120 3,013 10,111 496 – – – 20,740
Services – – – – – 293,633 16,392 175,325 20,189 – 2,472 – 508,011
Healthcare and social work – – – – – 165,981 41,578 233,447 25,932 – – – 466,938
Agriculture and fishing – – – – – 25,117 15,080 85,146 24,185 – – – 149,528
Media – – – – – 37,588 12,395 1,397 8,207 – – – 59,587
Utilities – – 8,750 – – 1,343,900 13,777 5,121 6,144 – – – 1,377,692
Public Administration 1,082,968 854,673 – – – – – – – – – – 1,937,641
Private individuals – – – – – 794 181,877 503,328 2,079 – – – 688,078
Technology – – – – – – – – – – – – –
Leisure and tourism – – – – – 54,580 12,217 37,239 21,098 – – – 125,134
Transport and logistics – – – – – 73,361 1,525 2,543 100 – – – 77,529
Real estate – – – – – 500,957 29,197 403,653 9,415 – – – 943,222
Insurance and pension funds – – – – – 501 – – – – – – 501
Food and beverages – – – – – 18,318 14,842 32,558 5,845 – – – 71,563
Other sectors – 233,130 50,441 – – 276,675 70,067 182,445 27,294 – – 100,818 940,870
Total 1,368,787 1,087,803 59,191 138,042 1,069,370 2,895,584 416,186 1,676,873 159,176 4,602 12,075 100,818 8,988,507
147
Sector distribution of the exposures 2014 by industry or counterparty type
Centralgovernments
or centralbanks
Regionalgovernments
or localauthorities
Publicsector
entities
MultilateralDevelopment
Banks Institutions Corporates Retail
Secured bymortgages
onimmovable
propertyExposuresin default High risk
Equityexposures
Otherexposures
Totalexposures
Banks and financial intermediation 175,225 – – 131,483 1,046,971 103,290 1,444 – 4,183 – 8,721 – 1,471,317
Basic materials – – – – – 2,134 2,456 3,121 11,266 – – – 18,977
Construction and infrastructure – – – – – 158 168 774 – – – – 1,100
Consumer products (non-food) – – – – – 1,437 1,527 1,094 495 – – – 4,553
Retail – – – – – 6,783 3,355 9,253 554 – – – 19,945
Services – – – – – 262,334 19,979 115,097 27,627 – – – 425,037
Healthcare and social work – – – – – 162,635 39,896 250,223 25,407 – – – 478,161
Agriculture and fishing – – – – – 14,113 13,231 64,520 28,467 – – – 120,331
Media – – – – – 31,027 11,359 1,207 10,156 – – – 53,749
Utilities – – 8,798 – – 1,254,659 13,272 6,243 32,002 – – – 1,314,974
Public Administration 1,247,433 410,280 – – – – – – – – – – 1,657,713
Private individuals – – – – – 1,051 153,136 325,109 816 – – – 480,112
Technology – – – – – – – – – – – – –
Leisure and tourism – – – – – 49,961 9,288 32,930 32,370 – – – 124,549
Transport and logistics – – – – – 15,519 1,148 2,172 4,052 – – – 22,891
Real estate – – – – – 436,801 26,066 330,194 922 – – – 793,983
Insurance and pension funds – – – – – 501 – – – – – – 501
Food and beverages – – – – – 16,310 17,047 33,410 9,099 – – – 75,866
Other sectors – 165,984 50,442 – – 197,305 65,960 180,694 10,739 – – 106,026 777,150
Total 1,422,658 576,264 59,240 131,483 1,046,971 2,556,018 379,332 1,356,041 198,155 – 8,721 106,026 7,840,909
148
Centralgovernments
or centralbanks
Regionalgovernments
or localauthorities
Publicsector
entities
MultilateralDevelopment
Banks Institutions Corporates Retail
Secured bymortgages
onimmovable
propertyExposuresin default High risk
Equityexposures
Otherexposures
Totalexposures
Banks and financial intermediation 175,225 – – 131,483 1,046,971 103,290 1,444 – 4,183 – 8,721 – 1,471,317
Basic materials – – – – – 2,134 2,456 3,121 11,266 – – – 18,977
Construction and infrastructure – – – – – 158 168 774 – – – – 1,100
Consumer products (non-food) – – – – – 1,437 1,527 1,094 495 – – – 4,553
Retail – – – – – 6,783 3,355 9,253 554 – – – 19,945
Services – – – – – 262,334 19,979 115,097 27,627 – – – 425,037
Healthcare and social work – – – – – 162,635 39,896 250,223 25,407 – – – 478,161
Agriculture and fishing – – – – – 14,113 13,231 64,520 28,467 – – – 120,331
Media – – – – – 31,027 11,359 1,207 10,156 – – – 53,749
Utilities – – 8,798 – – 1,254,659 13,272 6,243 32,002 – – – 1,314,974
Public Administration 1,247,433 410,280 – – – – – – – – – – 1,657,713
Private individuals – – – – – 1,051 153,136 325,109 816 – – – 480,112
Technology – – – – – – – – – – – – –
Leisure and tourism – – – – – 49,961 9,288 32,930 32,370 – – – 124,549
Transport and logistics – – – – – 15,519 1,148 2,172 4,052 – – – 22,891
Real estate – – – – – 436,801 26,066 330,194 922 – – – 793,983
Insurance and pension funds – – – – – 501 – – – – – – 501
Food and beverages – – – – – 16,310 17,047 33,410 9,099 – – – 75,866
Other sectors – 165,984 50,442 – – 197,305 65,960 180,694 10,739 – – 106,026 777,150
Total 1,422,658 576,264 59,240 131,483 1,046,971 2,556,018 379,332 1,356,041 198,155 – 8,721 106,026 7,840,909
149
Risk-weighted value per sector
2015Net exposure
value %
Risk-weighted
value %Average risk
weight %
Banks and financial intermediation 1,601,200 18 215,168 6 13
Basic materials 16,227 – 12,033 – 74
Construction and infrastructure 888 – 357 – 40
Consumer products (non-food) 3,158 – 1,648 – 52
Retail 20,740 – 10,588 – 51
Services 508,011 6 334,520 10 66
Healthcare and social work 466,938 5 259,163 8 56
Agriculture and fishing 149,528 2 86,609 3 58
Media 59,587 1 40,278 1 68
Utilities 1,377,692 15 1,156,207 34 84
Public Administration 1,937,641 22 – – –
Private individuals 688,078 8 232,807 7 34
Technology – – – – –
Leisure and tourism 125,134 1 87,444 3 70
Transport and logistics 77,529 1 42,893 1 55
Real estate 943,222 10 521,661 15 55
Insurance and pension funds 501 – 501 – 100
Food and beverages 71,563 1 38,952 1 54
Other sectors 940,870 10 382,850 11 41
Total 8,988,507 100 3,423,679 100 38
150
2014Net exposure
value %
Risk-weighted
value %Average risk
weight %
Banks and financial intermediation 1,471,317 19 220,785 7 15
Basic materials 18,977 – 17,336 1 91
Construction and infrastructure 1,100 – 451 – 41
Consumer products (non-food) 4,553 – 3,082 – 68
Retail 19,945 – 9,606 – 48
Services 425,037 5 296,707 10 70
Healthcare and social work 478,161 6 260,692 8 55
Agriculture and fishing 120,331 2 74,041 2 62
Media 53,749 1 35,319 1 66
Utilities 1,314,974 17 1,148,549 37 87
Public Administration 1,657,713 21 – – –
Private individuals 480,112 6 154,980 5 32
Technology – – – – –
Leisure and tourism 124,549 2 93,500 3 75
Transport and logistics 22,891 – 7,479 – 33
Real estate 793,983 10 444,398 14 56
Insurance and pension funds 501 – 501 – 100
Food and beverages 75,866 1 44,184 1 58
Other sectors 777,150 10 334,769 11 43
Total 7,840,909 100 3,146,379 100 40
These are the formal sectors as used in in supervisory reporting. Risk-weighted value is attributed to the sectorof the direct counterparty.
151
Geographic distribution of the exposures 2015
Centralgovernments
or centralbanks
Regionalgovernments
or localauthorities
Publicsector
entities
MultilateralDevelopment
Banks Institutions Corporates Retail
Secured bymortgages
onimmovable
propertyExposuresin default High risk
Equityexposures
Otherexposures
Totalexposures
Australia – – – – – 455 – – – – 420 – 875
Belgium 315,255 96,740 – – 60,899 800,971 80,452 192,976 4,700 – – 4,513 1,556,506
Denmark – – – – 1,021 808 – 497 – – 1,152 – 3,478
Finland – – – 40,000 – – 2 – – – – – 40,002
France 32 – – – 582 313,781 42 5,057 466 – 117 636 320,713
Germany 1,798 570,831 – – 142,765 159,084 2,838 67,666 4,813 – 50 4,860 954,705
Ireland – – – – 208 38,830 359 1,243 4,791 – – – 45,431
Italy – – – – – 2,275 6 – – – 130 – 2,411
Luxembourg – – – 98,042 – 35,785 4 – – 4,602 – – 138,433
The Netherlands 282,815 365,789 59,191 – 526,227 692,829 211,919 560,278 55,589 – 4,241 45,760 2,804,638
Norway – – – – – – 5 – – – 104 – 109
Spain 602,457 54,443 – – 127,985 522,541 89,612 272,436 61,739 – – 25,133 1,756,346
Sweden – – – – – – 8 – – – 52 – 60
Switzerland – – – – – – 4 74 – – – – 78
United Kingdom 166,430 – – – 209,683 325,511 30,906 576,646 27,078 – – 19,916 1,356,170
United States – – – – – 2,714 8 – – – 5,809 – 8,531
Other countries – – – – – – 21 – – – – – 21
Total 1,368,787 1,087,803 59,191 138,042 1,069,370 2,895,584 416,186 1,676,873 159,176 4,602 12,075 100,818 8,988,507
152
Centralgovernments
or centralbanks
Regionalgovernments
or localauthorities
Publicsector
entities
MultilateralDevelopment
Banks Institutions Corporates Retail
Secured bymortgages
onimmovable
propertyExposuresin default High risk
Equityexposures
Otherexposures
Totalexposures
Australia – – – – – 455 – – – – 420 – 875
Belgium 315,255 96,740 – – 60,899 800,971 80,452 192,976 4,700 – – 4,513 1,556,506
Denmark – – – – 1,021 808 – 497 – – 1,152 – 3,478
Finland – – – 40,000 – – 2 – – – – – 40,002
France 32 – – – 582 313,781 42 5,057 466 – 117 636 320,713
Germany 1,798 570,831 – – 142,765 159,084 2,838 67,666 4,813 – 50 4,860 954,705
Ireland – – – – 208 38,830 359 1,243 4,791 – – – 45,431
Italy – – – – – 2,275 6 – – – 130 – 2,411
Luxembourg – – – 98,042 – 35,785 4 – – 4,602 – – 138,433
The Netherlands 282,815 365,789 59,191 – 526,227 692,829 211,919 560,278 55,589 – 4,241 45,760 2,804,638
Norway – – – – – – 5 – – – 104 – 109
Spain 602,457 54,443 – – 127,985 522,541 89,612 272,436 61,739 – – 25,133 1,756,346
Sweden – – – – – – 8 – – – 52 – 60
Switzerland – – – – – – 4 74 – – – – 78
United Kingdom 166,430 – – – 209,683 325,511 30,906 576,646 27,078 – – 19,916 1,356,170
United States – – – – – 2,714 8 – – – 5,809 – 8,531
Other countries – – – – – – 21 – – – – – 21
Total 1,368,787 1,087,803 59,191 138,042 1,069,370 2,895,584 416,186 1,676,873 159,176 4,602 12,075 100,818 8,988,507
153
Geographic distribution of the exposures 2014
Centralgovernments
or centralbanks
Regionalgovernments
or localauthorities
Publicsector
entities
MultilateralDevelopment
Banks Institutions Corporates Retail
Secured bymortgages
onimmovable
propertyExposuresin default High risk
Equityexposures
Otherexposures
Totalexposures
Australia – – – – – 457 – – – – 386 – 843
Belgium 368,657 56,789 – – 88,280 713,385 64,462 147,345 11,027 – – 2,317 1,452,262
Denmark – – – – 2,053 872 – 527 2,192 – 1,125 – 6,769
Finland – – – 40,004 – – – – – – – – 40,004
France 52 – – – 302 245,098 35 3,872 272 – 113 698 250,442
Germany 1,424 11,713 – – 132,972 133,998 2,201 80,656 6,147 – 50 5,829 374,990
Ireland – – – – 165 36,378 982 1,305 10,423 – – – 49,253
Italy – – – – – 2,534 2 – – – 130 – 2,666
Luxembourg – – – 91,479 – 14,443 5 – – – – – 105,927
The Netherlands 441,163 468,769 59,240 – 527,138 615,396 207,129 434,102 51,813 – 1,672 74,320 2,880,742
Norway – – – – – – 6 – – – 110 – 116
Spain 465,073 38,993 – – 107,293 508,790 75,210 221,686 69,380 – – 18,151 1,504,576
Sweden – – – – – – 9 – – – 51 – 60
Switzerland – – – – – – 2 114 – – – – 116
United Kingdom 146,289 – – – 188,768 284,170 29,233 466,381 46,901 – – 4,711 1,166,453
United States – – – – – – 8 – – – 5,084 – 5,092
Other countries – – – – – 497 48 53 – – – – 598
Total 1,422,658 576,264 59,240 131,483 1,046,971 2,556,018 379,332 1,356,041 198,155 – 8,721 106,026 7,840,909
154
Centralgovernments
or centralbanks
Regionalgovernments
or localauthorities
Publicsector
entities
MultilateralDevelopment
Banks Institutions Corporates Retail
Secured bymortgages
onimmovable
propertyExposuresin default High risk
Equityexposures
Otherexposures
Totalexposures
Australia – – – – – 457 – – – – 386 – 843
Belgium 368,657 56,789 – – 88,280 713,385 64,462 147,345 11,027 – – 2,317 1,452,262
Denmark – – – – 2,053 872 – 527 2,192 – 1,125 – 6,769
Finland – – – 40,004 – – – – – – – – 40,004
France 52 – – – 302 245,098 35 3,872 272 – 113 698 250,442
Germany 1,424 11,713 – – 132,972 133,998 2,201 80,656 6,147 – 50 5,829 374,990
Ireland – – – – 165 36,378 982 1,305 10,423 – – – 49,253
Italy – – – – – 2,534 2 – – – 130 – 2,666
Luxembourg – – – 91,479 – 14,443 5 – – – – – 105,927
The Netherlands 441,163 468,769 59,240 – 527,138 615,396 207,129 434,102 51,813 – 1,672 74,320 2,880,742
Norway – – – – – – 6 – – – 110 – 116
Spain 465,073 38,993 – – 107,293 508,790 75,210 221,686 69,380 – – 18,151 1,504,576
Sweden – – – – – – 9 – – – 51 – 60
Switzerland – – – – – – 2 114 – – – – 116
United Kingdom 146,289 – – – 188,768 284,170 29,233 466,381 46,901 – – 4,711 1,166,453
United States – – – – – – 8 – – – 5,084 – 5,092
Other countries – – – – – 497 48 53 – – – – 598
Total 1,422,658 576,264 59,240 131,483 1,046,971 2,556,018 379,332 1,356,041 198,155 – 8,721 106,026 7,840,909
155
Risk-weighted value per country
2015Net exposure
value %
Risk-weighted
value %Average risk
weight %
Australia 875 – 875 – 100
Belgium 1,556,506 17 609,725 18 39
Denmark 3,478 – 2,160 – 62
Finland 40,002 – – – –
France 320,713 4 263,278 8 82
Germany 954,705 11 187,591 6 20
Ireland 45,431 1 43,900 1 97
Italy 2,411 – 2,408 – 100
Luxembourg 138,433 2 30,534 1 22
The Netherlands 2,804,638 31 1,007,935 30 36
Norway 109 – 106 – 97
Spain 1,756,346 19 697,004 20 40
Sweden 60 – 56 – 93
United Kingdom 1,356,170 15 561,507 16 41
United States 8,531 – 16,562 – 194
Other countries 99 – 38 – 38
Total 8,988,507 100 3,423,679 100 38
156
2014Net exposure
value %
Risk-weighted
value %Average risk
weight %
Australia 843 – 843 – 100
Belgium 1,452,262 18 597,083 19 41
Denmark 6,769 – 5,335 – 79
Finland 40,004 1 – – –
France 250,442 3 217,251 7 87
Germany 374,990 5 176,968 6 47
Ireland 49,253 1 49,403 2 100
Italy 2,666 – 2,665 – 100
Luxembourg 105,927 1 14,443 – 14
The Netherlands 2,880,742 37 901,117 29 31
Norway 116 – 113 – 97
Spain 1,504,576 19 668,824 21 44
Sweden 60 – 54 – 90
United Kingdom 1,166,453 15 499,235 16 43
United States 5,092 – 12,712 – 250
Other countries 714 – 333 – 47
Total 7,840,909 100 3,146,379 100 40
Risk-weighted value is attributed to the country of the direct counterparty.
157
Maturity per exposure class (asset class)
The following tables provide an overview of the remaining maturity of the assets per exposure class. The payableon demand and indefinite maturities include accrued interest and fees, doubtful debt provisions and balancesheet items with no, or unknown, maturity.
2015
Payable ondemand
andindefinite
2 days ormore and
shorter than3 months
More than3 months
and shorterthan 1 year
More than1 year
and shorterthan 5 years
More than5 years
Totalassets
Central governments andcentral banks 299,531 163,869 233,527 461,017 210,843 1,368,787
Regional governments andlocal authorities 4,334 627,019 89,114 161,627 203,709 1,085,803
Public sector entities 441 – – 35,500 23,250 59,191
Multilateral DevelopmentsBanks 306 – 10,307 127,429 – 138,042
Banks 302,761 286,964 63,993 404,245 – 1,057,963
Corporates 118,897 95,670 198,713 821,704 1,180,998 2,415,982
Retail exposures 20,785 2,356 9,252 39,124 201,707 273,224
Secured by mortgages onimmovable property 36,470 13,637 59,948 291,347 1,086,590 1,487,992
Past due items 130,670 3,554 2,635 8,328 8,775 153,962
High risk 1,728 – – – – 1,728
Equity 12,075 – – – – 12,075
Other items 100,818 – – – – 100,818
Total 1,028,816 1,193,069 667,489 2,350,321 2,915,872 8,155,567
158
2014
Payable ondemand
andindefinite
2 days ormore and
shorter than3 months
More than3 months
and shorterthan 1 year
More than1 year
and shorterthan 5 years
More than5 years
Totalassets
Central governments andcentral banks 191,005 251,478 295,708 386,408 298,059 1,422,658
Regional governments andlocal authorities 3,299 244,499 89,320 87,846 151,300 576,264
Public sector entities 490 – – 27,750 31,000 59,240
Multilateral DevelopmentsBanks 186 – – 131,297 – 131,483
Banks 188,442 351,874 167,182 272,282 57,294 1,037,074
Corporates 129,359 81,071 141,622 712,595 1,091,670 2,156,317
Retail exposures 22,170 1,787 8,731 34,267 174,741 241,696
Secured by mortgages onimmovable property 45,900 26,657 40,162 228,733 870,028 1,211,480
Past due items 161,299 3,231 2,164 10,090 10,364 187,148
Equity 8,721 – – – – 8,721
Other items 106,026 – – – – 106,026
Total 856,897 960,597 744,889 1,891,268 2,684,456 7,138,107
159
Company Balance Sheet as at 31 December 2015
Before appropriation of profitin thousands of EUR Reference* 31.12.2015 31.12.2014
AssetsCash 285,819 175,225
Government paper 213,233 208,782
Banks 32 539,432 572,874
Loans 5,216,637 4,266,523
Interest-bearing securities 1,689,968 1,710,625
Shares 33 20 4
Participating interests 34 37,347 26,177
Intangible fixed assets 35 14,448 9,912
Property and equipment 36 37,591 20,858
Other assets 35,876 31,069
Prepayments and accrued income 143,684 133,614
Total assets 8,214,055 7,155,663
LiabilitiesBanks 39,798 54,627
Funds entrusted 37 7,292,317 6,295,269
Other liabilities 19,489 18,609
Accruals and deferred income 74,231 77,702
Provisions 38 2,453 581
7,428,288 6,446,788
Subordinated liabilities 5,250 5,250
Capital 39 484,329 450,732
Share premium reserve 40 123,935 117,911
Revaluation reserve 41 503 390
Statutory reserve 42 11,286 5,510
Other reserves 43 119,737 98,957
Retained earnings 40,727 30,125
Equity 780,517 703,625
Total equity and liabilities 8,214,055 7,155,663
Contingent liabilities 63,060 62,260
Irrevocable facilities 717,672 593,771
780,732 656,031
* References relate to the notes to the company's financial statements starting on page 164. These form an integral partof the consolidated annual accounts.
Company Profit and Loss Account for 2015
in thousands of EUR 2015 2014
Result on participating interests after taxation 6,087 8,047
Other result after taxation 34,640 22,078
Net profit 40,727 30,125
161
Company Statement of Changesin the Equity for 2015
in thousands of EURShare
capitalShare
PremiumRevaluation
reserveStatutory
reserveOther
reserveRetainedearnings
Totalequity
Equity as at 1 January 2014 427,452 118,162 180 5,116 77,439 25,683 654,032
Increase of share capital 14,950 8,079 23,029
Stock dividend 8,330 –8,330 –
Revaluation of property, equipment and participation interest after taxation 200 200
Realisation of revaluation 10 –10 –
Exchange rate results from business operations abroad after taxation 590 590
Profit appropriation for previous financial year, addition to the other reserves 8,667 –8,667 –
Profit appropriation for previous financial year, dividend –17,016 –17,016
Reverted dividend – –
Dividend not distributed in cash 12,662 12,662
Transfer to statutory reserve for development costs –196 196 –
Purchasing or sale of own depository receipts 3 3
Result for financial year 30,125 30,125
Equity as at 31 December 2014 450,732 117,911 390 5,510 98,957 30,125 703,625
Increase of share capital 24,858 14,763 39,621
Stock dividend 8,739 –8,739 –
Revaluation of property, equipment and participation interest after taxation 104 104
Realisation of revaluation 9 –9 –
Exchange rate results from business operations abroad after taxation 563 563
Profit appropriation for previous financial year, addition to the other reserves 12,375 –12,375 –
Profit appropriation for previous financial year, dividend –17,750 –17,750
Dividend not distributed in cash 13,633 13,633
Reverted dividend – –
Transfer to statutory reserve for development costs 5,213 –5,213 –
Purchasing or sale of own depository receipts –6 –6
Result for financial year 40,727 40,727
Equity as at 31 December 2015 484,329 123,935 503 11,286 119,737 40,727 780,517
162
in thousands of EURShare
capitalShare
PremiumRevaluation
reserveStatutory
reserveOther
reserveRetainedearnings
Totalequity
Equity as at 1 January 2014 427,452 118,162 180 5,116 77,439 25,683 654,032
Increase of share capital 14,950 8,079 23,029
Stock dividend 8,330 –8,330 –
Revaluation of property, equipment and participation interest after taxation 200 200
Realisation of revaluation 10 –10 –
Exchange rate results from business operations abroad after taxation 590 590
Profit appropriation for previous financial year, addition to the other reserves 8,667 –8,667 –
Profit appropriation for previous financial year, dividend –17,016 –17,016
Reverted dividend – –
Dividend not distributed in cash 12,662 12,662
Transfer to statutory reserve for development costs –196 196 –
Purchasing or sale of own depository receipts 3 3
Result for financial year 30,125 30,125
Equity as at 31 December 2014 450,732 117,911 390 5,510 98,957 30,125 703,625
Increase of share capital 24,858 14,763 39,621
Stock dividend 8,739 –8,739 –
Revaluation of property, equipment and participation interest after taxation 104 104
Realisation of revaluation 9 –9 –
Exchange rate results from business operations abroad after taxation 563 563
Profit appropriation for previous financial year, addition to the other reserves 12,375 –12,375 –
Profit appropriation for previous financial year, dividend –17,750 –17,750
Dividend not distributed in cash 13,633 13,633
Reverted dividend – –
Transfer to statutory reserve for development costs 5,213 –5,213 –
Purchasing or sale of own depository receipts –6 –6
Result for financial year 40,727 40,727
Equity as at 31 December 2015 484,329 123,935 503 11,286 119,737 40,727 780,517
163
Notes to the Company’sFinancial Statementsin thousands of EUR
GeneralThe accounting principles for valuation and determination of results are the same as those for the consolidatedAnnual Accounts.
In accordance with Section 2:402 of The Netherlands Civil Code, the company profit and loss account onlycontains a breakdown of the net result into the result on participating interests and the Other result.
For those items not included in these Notes, please see the Notes to the consolidated Annual Accounts.
Assets
32. Banks
2015 2014
On demand deposits with banks 293,023 181,583
Deposits with banks 246,409 391,291
539,432 572,874
The on demand deposits can be freely disposed of.
33. Shares
2015 2014
S.W.I.F.T. SCRL 20 3
SEPA Biogasanlage Hattingen GmbH – 1
20 4
The movement in shares is as follows:
2015 2014
Balance sheet value as at 1 January 4 4
Purchase 17 –
Sales –1 –
Balance sheet value as at 31 December 20 4
164
34. Participating Interests
2015 2014
Participating interests in group companies 22,376 16,456
Other participating interests 14,971 9,721
37,347 26,177
This relates to equity participations that are held long-term for business operation purposes. The statement ofequity participations in accordance with Section 2:379 of The Netherlands Civil Code is included under theaccounting principles for consolidation in the Notes to the consolidated Annual Accounts.
The movement in this item is as follows:
2015 2014
Balance sheet value as at 1 January 26,177 29,083
Acquisitions 2,185 113
Incorporations – 19
Increase of capital 2,023 10
Result on participating interests 6,087 8,047
Transfer from or to provision for negative equity of participatinginterests – –
Dividend paid – –5,260
Revaluation 313 377
Repayment of capital – –6,802
Sale – –
Exchange rate result on foreign currency 562 590
Balance sheet value as at 31 December 37,347 26,177
165
35. Intangible Fixed Assets
2015 2014
Development costs for information systems 12,652 7,974
Computer software 1,796 1,938
14,448 9,912
Development costs for information systems
The development costs for information systems relate to the development costs for the banking system.
The movement in the development costs for the information systems item is as follows:
2015 2014
Purchase value as at 1 January 22,237 20,045
Cumulative amortisation as at 1 January –14,263 –12,929
Balance sheet value as at 1 January 7,974 7,116
Capitalised expenses 6,183 2,253
Amortisation –1,505 –1,197
Impairments – –198
Balance sheet value as at 31 December 12,652 7,974
36. Property and Equipment
2015 2014
Property for own use 22,290 6,281
Equipment 15,301 14,577
37,591 20,858
166
The movement in the property for own use is as follows:
2015 2014
Purchase value as at 1 January 9,045 9,045
Cumulative revaluation as at 1 January –2,302 –2,302
Cumulative depreciation as at 1 January –462 –337
Balance sheet value as at 1 January 6,281 6,406
Purchase 16,481 –
Depreciation –158 –125
Revaluation – –
Exchange rate differences –314 –
Balance sheet value as at 31 December 22,290 6,281
The movement in equipment is as follows:
2015 2014
Purchase value as at 1 January 28,333 26,101
Cumulative depreciation as at 1 January –13,756 –11,951
Balance sheet value as at 1 January 14,577 14,150
Purchase 4,423 3,909
Sale* –376 –99
Depreciation* –3,466 –3,589
Exchange rate differences 143 206
Balance sheet value as at 31 December 15,301 14,577
* Excluding disposal in the amount of EUR 1.2 million (2014: EUR 1.9 million)
167
Liabilities
37. Funds Entrusted
2015 2014
Savings accounts 4,866,530 4,392,823
Other funds entrusted 2,425,787 1,902,446
7,292,317 6,295,269
The Other funds entrusted item includes an amount of EUR 9.8 million (2014: EUR 6.5 million) for deposits fromconsolidated participating interests.
38. Provisions
2015 2014
Other provisions 2,453 581
2,453 581
The movement of the provisions is as follows:
2015 2014
Balance sheet value as at 1 January 581 355
Addition 1,873 200
Withdrawal – –
Release –4 –
Exchange rate differences 3 26
Balance sheet value as at 31 December 2,453 581
168
39. Capital
The authorised capital totals EUR 1 billion and is divided into 20 million shares, each with a nominal value ofEUR 50. At year-end, there were 9,686,584 shares (2014: 9,014,634 shares), each of EUR 50, issued to and fullypaid up by Stichting Administratiekantoor Aandelen Triodos Bank. As at the same date, StichtingAdministratiekantoor Aandelen Triodos Bank had also issued 9,686,584 depository receipts (2014: 9,014,634depository receipts), each of EUR 50.
The purchasing and reissuing of depository receipts for own shares is charged or credited respectively to theOther reserves. Any balance remaining after the re-issuing of all own depository receipts purchased shall beplaced at the disposal of the Annual General Meeting.
The movement in the number of shares is as follows:
2015 2014
Number of shares as at 1 January 9,014,634 8,549,035
Increase of share capital 497,165 298,994
Stock dividend 174,785 166,605
Number of shares as at 31 December 9,686,584 9,014,634
40. Share Premium Reserve
This item includes the share premium reserve, which is composed of deposits that exceed the nominal capital,after deduction of capital transfer tax. The full balance of the share premium reserve has been recognised assuch for tax purposes.
41. Revaluation Reserve
The revaluation reserve relates to the unrealised value adjustments in respect of the acquisition price forparticipating interests and property for own use.
42. Statutory Reserve
2015 2014
Development costs 13,668 8,455
Conversion differences –2,382 –2,945
11,286 5,510
169
Supervisory BoardErnst-Jan BoersDavid CarringtonAart Jan de Geus, ChairMathieu van den HoogenbandUdo PhilippCarla van der Weerdt
Executive BoardPierre AebyPeter Blom, ChairJellie Banga
Development costs
The movement in the statutory reserve for development costs is as follows:
2015 2014
Balance sheet value as at 1 January 8,455 8,651
Transfer of other reserve 5,213 –196
Balance sheet value as at 31 December 13,668 8,455
Conversion differences
The movement in the statutory reserve for conversion differences is as follows:
2015 2014
Balance sheet value as at 1 January –2,945 –3,535
Exchange results on participating interests 563 590
Balance sheet value as at 31 December –2,382 –2,945
43. Other Reserves
The movement in other reserves includes purchasing of own depository receipts. At year-end 2015, Triodos Bankhad not purchased own depository receipts (2014: nil).
Zeist, 25 February 2016
170
Other Information
Profit appropriationAs set out in the Articles of Association, the appropriation of profit is as follows:
Part of the profit as reported in the adopted profit and loss account shall be used by the Executive Board to formor add to the reserves to the extent that this is deemed desirable. The remaining profit shall be distributed tothe shareholders, unless the General Meeting decides otherwise.
All depository receipts issued up to and including 20 May 2016 are entitled to the final dividend for the financialyear 2015. The results of Triodos Bank N.V. are taken into consideration in the issue price.
The proposed appropriation of profit is based on the number of depository receipts issued as at 31 December2015, minus the number of depository receipts purchased by Triodos Bank. The final proposal will be submittedat the Annual General Meeting of Depository Receipt Holders.
The proposed appropriation of profit (in thousands of EUR) is as follows:
Net profit 40,727
Addition to the other reserves –21,838
Dividend (EUR 1.95 per depository receipt) 18,889
Subsequent eventThere are no subsequent events that are of material nature for the annual accounts.
BranchesIn addition to its head office in The Netherlands, Triodos Bank has branches in The Netherlands, Belgium, theUnited Kingdom, Spain and Germany.
171
Combined Independent Auditor’s and Assurance ReportTo: the General Meeting of Shareholders and the Supervisory Board of Triodos Bank N.V.
We have been engaged by Triodos Bank N.V., Zeist (hereafter referred to as ‘Triodos Bank’) to conduct (1) an audit(reasonable assurance) of the financial statements 2015 and (2) a review (limited assurance) of pages 10 to 37and pages 186 to 192 of the Executive Board Report 2015 (hereafter referred to as ‘the reviewed section of theReport’).
Our opinion and conclusionAuditor’s report on the audit of the financial statements
In our opinion:• the consolidated financial statements on pages 52 to 159 give a true and fair view of the financial position ofTriodos Bank as at December 31, 2015, and of its result and its cash flows for 2015 in accordance with Part 9 ofBook 2 of the Netherlands Civil Code;• the company financial statements on page 160 to 170 give a true and fair view of the financial position ofTriodos Bank as at 31 December 2015, and of its result for 2015 in accordance with Part 9 of Book 2 of theNetherlands Civil Code.
Assurance report on the reviewed section of the Report
Based on our review, nothing has come to our attention to indicate that the information in the reviewed sectionof the Report is not prepared, in all material respects, in accordance with the requirements as included insection 2:391 of the Netherlands Civil Code.
What we have audited and reviewedAuditor’s report on the audit of the financial statements
We have audited the financial statements 2015 of Triodos Bank N.V., based in Zeist. The financial statementsinclude the consolidated financial statements and the company financial statements.
The consolidated financial statements comprise:• the consolidated balance sheet as at December 31, 2015;• the consolidated profit and loss account for 2015 and the following consolidated statements for 2015: thestatements of comprehensive income, changes in shareholders’ equity and cash flows; and• the notes comprising a summary of the significant accounting policies and other explanatory information.
The company financial statements comprise:• the company balance sheet as at December 31, 2015;• the company profit and loss account for 2015; and• the notes comprising a summary of the significant accounting policies and other explanatory information.
Assurance report on the reviewed section of the Report
We have reviewed pages 10 to 37 and pages 186 to 192 of the Executive Board Report 2015.
Basis for our opinion and conclusionWe conducted our audit and our review in accordance with Dutch law, including the Dutch Standards onAuditing and the Dutch Standard 3000 Assurance Engagements Other Than Audits or Reviews of Historical
172
OPINION AND CONCLUSION
• Unqualified audit opinion• Unqualified review conclusion
MATERIALITY
• EUR 2.1 million overall materiality• Based on 4% profit before tax
SCOPE
• Triodos has a limited number of consolidatedentities.• More than 99% of total assets and 97% of profitbefore tax in full audit scope
KEY AUDIT MATTERS
• Valuation of loan portfolio• Information Technology environment• Valuation of the deferred tax asset
KEY REVIEW MATTERS
• Assessing the material aspects for the ExecutiveBoard Report• Reviewing methodology and reporting for impactmeasures
Financial Information respectively. Our responsibilities under those standards are further described in thesection “Our responsibility for the audit of the financial statements and review of the reviewed section of theReport” of our report.
We are independent of Triodos Bank in accordance with the Verordening inzake de onafhankelijkheid vanaccountants bij assurance-opdrachten (ViO) and other relevant independence regulations in the Netherlands.Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA).
We believe that the audit and review evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion respectively our conclusion.
Audit approachSummary
MaterialityMisstatements in the financial statements and the reviewed section of the Report can arise from fraud or errorsand are considered material if, individually or in the aggregate, they could reasonably be expected to influencethe economic decisions of users taken on the basis of these financial statements and the reviewed section ofthe Report. The materiality affects the nature, timing and extent of our audit and review procedures and theevaluation of the effect of identified misstatements on our opinion and conclusion.
Based on our professional judgement we determined the materiality for the financial statements as a whole atEUR 2.1 million (2014: 2.1 million). The materiality is determined with reference to profit before tax (4%)(2014: 5%) as we consider this benchmark as the most appropriate benchmark given the nature and business ofthe Triodos Bank. In arriving at this level of materiality, we have also taken into account misstatements and/orpossible misstatements that in our opinion are material for qualitative reasons for the users of the financialstatements.
173
Profit before tax: >97% full scope audit Total assets: >99% full scope audit
We agreed with the Supervisory Board that misstatements in excess of EUR 0.1 million, which are identified duringthe audit of the financial statements, would be reported to them, as well as other misstatements in the financialstatements and the reviewed section of the Report that in our view must be reported on qualitative grounds.
Scope of the group audit and reviewTriodos Bank operates five branches in five different European countries and is the parent company of a groupof legal entities. Together they form the group of which the financial information is included in the financialstatements of Triodos Bank.
Given that we are ultimately responsible for the opinion, we are also responsible for directing, supervising andperforming the group audit. In this respect we have determined the nature and extent of the audit procedures tobe carried out for group entities and branches. Decisive were the size and/or the risk profile of the group entitiesor branches. On this basis, we selected group entities for which an audit had to be carried out on the completeset of financial information.
Our group audit mainly focused on significant branches and group entities where significant should beinterpreted as significant in size and financial impact as well as significant from a qualitative perspective oraudit risk perspective, for example due to specific compliance and regulations, valuation matters or governanceaspects. We have:• Performed audit procedures ourselves at Triodos Bank Head Office and the Triodos Bank Dutch branch.• We used the work of other KPMG auditors when auditing Triodos Bank Spanish, United Kingdom, Belgian andGerman branches and Triodos Investment Management B.V. We provided these auditors detailed instructions,that included significant audit areas including the relevant risks of material misstatement, the procedures to beperformed, and the information required to be reported back to us. We performed site visits to the Spanish, UKand German branches and held audit update conference calls with local auditors throughout the audit. We alsoperformed audit file reviews for all full scope audit branches and entities.• Performed analytical review procedures at other group entities.
By performing the procedures mentioned above at components, together with additional procedures at grouplevel, we have been able to obtain sufficient and appropriate audit evidence to provide an opinion on thefinancial statements.
Key audit and review mattersKey audit and review matters are those matters that, in our professional judgement, were of most significancein our audit of the financial statements and our review of the reviewed section of the Report. We havecommunicated the key audit and review matters to the Supervisory Board. The key audit and review matters arenot a comprehensive reflection of all matters discussed.
These matters were addressed in the context of our audit of the financial statements as a whole and the reviewof the reviewed section of the Report and in forming our opinion respectively conclusion thereon. We do notprovide a separate opinion or conclusion on these matters.
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KEY AUDIT MATTER 1The valuation of the loan portfolio
DescriptionTriodos Bank’s consolidated balance sheet consists for a considerable part of commercial loans andmortgages (loans). Loans are accounted for at amortised cost less any impairment charges. The valuation ofa loan is depending on the credit risk related to that loan. When there is objective evidence that a loan mightnot be recovered in full or in accordance with the contractual terms, for example when there is significantdoubt or evidence on breaches of interest payments or repayment of principal, the credit risk and thevaluation of that loan is specifically assessed. This assessment requires management judgement and issubject to estimation uncertainty and can lead to the recognition of an impairment loss on the loan or aspart of the collective provision on a portfolio of loans with similar risk characteristics.
Our responseWe performed specific audit procedures on the valuation of the Bank’s loan portfolio in all branches ofTriodos Bank. These audit procedures consisted of understanding and testing the controls designed andimplemented by the Company to provide management assurance over the commercial and mortgagelending processes as well as understanding and testing the controls designed and applied by the Companyfor its credit risk management and impairment process of its commercial and mortgage loans. These creditrisk management and impairment processes include but are not limited to periodic revision of loansincluding applying policies and guidance around ongoing credit risk monitoring of loans and subsequentlythe evaluation and valuation assessments of these loans. We also inspected individual loan files. Theseprocedures included amongst other procedures, selecting 245 individual loan files taking into considerationsector concentration risk such as for example the solar portfolio in Spain and focusing on those loans with ahigher credit risk profile and/or an actual event of default in the year under investigation. We challenged theappropriateness of management’s key assumptions in the impairment testing (including valuation reports ofcollateral, scenario analysis, loan restructuring measures and collateral valuation haircuts) and performedprocedures testing the accuracy of management’s calculation of the recoverable amount of the individualloans. In relation to the Bank’s mortgage portfolio we assessed the collective provisioning methodologyapplied including the relevant parameters in the calculation.
Our observationBased on our audit we assess the loan portfolio valuation, in line with prior year, as mildly cautious. We alsofound that the Bank’s loan documentation showed further enhanced quality and to be up to standardhowever can still further improve in overall consistency across the different countries.
KEY AUDIT MATTER 2Information Technology environment
DescriptionIn its day-to-day operations Triodos Bank heavily depends on an effective and efficient informationtechnology environment (IT environment). Having a solid general IT and application control framework inplace is most critical to the operations of the Company since this supports the banking and investmentmanagement service offerings which to a large extent are being offered through the internet channel. It istherefore of importance that safeguards exist regarding the reliability and continuity of the electronic dataprocessing.
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Our responseWe performed audit work regarding the IT environment in all branches and for relevant applications andplatforms for the purpose of the financial statements audit. Our audit work included applications andplatforms supporting the Company’s business operations as well as those driving the financial accounting,including the enabling infrastructure and service providers. As part of our audit we engaged IT auditors anddefined a specific IT audit plan that outlines IT audit procedures to be performed in each branch in relationto the financial statements audit. In our audit plan we distinguished between general IT audit proceduresfocused on amongst others assessing effectiveness of access controls and security measures and ITapplication audit procedures focused on the assessment of controls embedded in the operational systems.Our plan was also tailored towards the fact that the Company operates both an in-house developed ITsystem in some of its locations as well as using external IT service providers in others.
Our observationOur test procedures on the design and operating effectiveness of IT control measures taken, did not result insignificant findings on the reliability and continuity of the electronic data processing for the purpose of theaudit of the financial statements. We noted improvements in 2015 regarding access control and informationsecurity measures and discussed further improvements on these topics in 2016. We noted a further growth(and respective complexity) of Triodos’ IT domain. We observed specific focus and actions being taken tosafeguard the Bank’s IT continuity and assurance for the future. We noted that the general IT controlframework is subject to continuous improvements, further enhancements and formalisation, with emphasison improving the control on increasing functional and technical developments.
KEY AUDIT MATTER 3Valuation of the deferred tax asset
DescriptionAs described in note 11 of the financial statements on page 73 Triodos Bank recognised a deferred tax asset(DTA) for the amount of EUR 6.9 million for tax losses carried forward in respect of net operating lossesincurred by the German branch. The DTA represents management’s assessment of the amount of netoperating losses incurred by the German branch in the past that can be offset with future German taxableprofits. The Company’s German branch has not yet been able to achieve a break-even point and reported aloss for 2015. This resulted in further increase of the DTA balance in 2015. Given the fact that the DTAbalance is dependent on management’s estimation on future profitability it is considered as a materialestimation uncertainty in our audit.
Our responseWe investigated the available documentation supporting the DTA as at 31 December 2015 and we observedthat this documentation was also reviewed by the Company’s Supervisory Board. We noted that the financialperformance of the Branch improved compared to 2014, however is still loss making and actual 2015 growthof the loan book was behind budget. We also inquired with Group and local management on the businessoutlook of the German branch and we challenged management’s assumptions underpinning it. Moreover, wechallenged management on other relevant expectations applied in their calculation, assessment andconclusions, such as on: the local business environment, market size, relevant competition and businesscontinuity. In performing our procedures and reaching our conclusion we also considered the fact thatGerman tax law allows for indefinite recovery of net operating losses through future taxable income.
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Our observationWe found the DTA to be appropriately supported with underlying documentation and calculations, whichhave been derived from the updated business outlook for Triodos Bank Germany.
KEY REVIEW MATTER 1Assessing the material aspects for the Executive Board Report
DescriptionArticle 391 Part 9 of Book 2 of the Dutch Civil Code sets the legal requirements for the items to be included inthe Executive Board Report. Management of Triodos Bank decides on the aspects they consider materialbased on stakeholder expectations and the relevance for the business of the bank, Triodos Bank updatedthe materiality analysis process in 2015 and adapted the way the outcome was presented in the ExecutiveBoard Report. The materiality analysis is subject to significant management judgement.
Our responseWe reviewed the process that the Bank executed during 2015 to identify and prioritise the items to bereported. We also conducted a media search and a peer review to assess potential material other aspects tobe included and compared these with the Company's materiality analysis. We assessed the results from themateriality analysis against the topics as included in the Executive Board Report, also taking into accountthe guidance as included in Dutch Accounting Standard 400.
Our observationWe found the process that Triodos Bank executed during 2015 to be sufficiently solid to identify relevantmaterial topics for inclusion in the Executive Board Report. We also observed that the material topics asidentified in the related process have been reflected in the Executive Board Report in the context of thepurpose of the report.
KEY REVIEW MATTER 2Reviewing methodology and reporting for impact measures
DescriptionThe company reports on its impact along eight measures. In 2015 Triodos Bank added two additional impactmeasures and the impact per customer for five of the eight impact measures. The data for the impactindicators are inherently subject to assumptions and judgement. In conjunction with the relatedexplanations this may increase the risk that the impact reported lacks sufficient balance for a properunderstanding of its use and reliability.
Our responseWe reviewed the definitions and methodology set by the Company and held interviews with managementand key individuals in all branches to understand their application of these definitions and methodology. Werequested underlying evidence for the impact figures reported on a sample basis and we compared thereported projects with the Company's underlying information. We also conducted a data analysis on thedata reported to identify any potential material anomalies. Finally we reviewed whether the presentation ofthe information to assess whether it provides a balanced overview of the impact as measured by theCompany.
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Our observationWe concluded that the data reported in the Executive Board Report are sufficiently supported by underlyinginformation. We also concluded that the impact information as presented as a whole, including underlyingassumptions, provides a balanced overview of the impact as estimated by the Company.
Responsibilities of the Executive Board and the Supervisory Board for the financialstatements and the Report of the Executive BoardThe Executive Board is responsible for the preparation and fair presentation of these financial statements inaccordance with Part 9 of Book 2 of the Netherlands Civil Code, and for the preparation of the (complete) Reportof the Executive Board in accordance with Part 9 of Book 2 of the Netherlands Civil Code.
Furthermore, the Executive Board is responsible for such internal control as it determines is necessary toenable the preparation of the financial statements and the reviewed section of the Report of the ExecutiveBoard that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, the Executive Board is responsible for assessing thecompany’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, TheManagement should prepare the financial statements using the going concern basis of accounting unless theExecutive Board either intends to liquidate the company or to cease operations, or has no realistic alternativebut to do so. The Executive Board should disclose events and circumstances that may cast significant doubt onthe company’s ability to continue as a going concern in the financial statements and the Executive BoardReport.
The Supervisory Board is responsible for overseeing the company’s financial and non-financial reportingprocess.
Our responsibility for the audit of the financial statements and the review of thereviewed section of the ReportAuditor’s report on the audit of the financial statements
Our objective is to plan and perform the audit to obtain sufficient and appropriate audit evidence for ouropinion. Our audit has been performed with a high, but not absolute, level of assurance, which means we maynot have detected all errors and fraud. For a further description of our responsibilities in respect of an audit offinancial statements we refer to the website of the professional body for accountants in the Netherlands (NBA)www.nba.nl/standardtexts-auditorsreport.
Assurance report on the reviewed section of the Report
The objective of our review is to provide limited assurance on whether the information in the reviewed section ofthe Report is, in all material respects, prepared in accordance with section 2:391 of the Netherlands Civil Codebased on the Dutch Standard on Assurance engagements 3000. We do not provide any assurance on thefeasibility of the targets, expectations policy and ambitions of Triodos Bank.
Procedures performed to obtain a limited level of assurance are aimed at determining the plausibility ofinformation and are less extensive than those for a reasonable level of assurance.
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Our procedures included e.g.:• A risk analysis, including a media search, to identify potential material other aspects for the company in thereporting period to include in the Executive Board Report.• Evaluating the design and implementation of systems and processes for the collection, processing and controlof the information in the Executive Board Report, including the consolidation of the data for the report.• Interviewing management and key individuals at group and branch level responsible for strategy, policies,management, internal controls and reporting.• Interviews with key individuals at group and branch level responsible for providing the information in theExecutive Board Report.• From the matters communicated with the Supervisory Board, we determine those matters that were of mostsignificance to the audit of the financial statements of the current period and are therefore the key auditmatters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosureabout the matter or when, in extremely rare circumstances, not mentioning it is in the public interest.• Evaluating internal and external documentation, based on sampling, to determine the adequacy of theinformation in the Executive Board Report.• An analytical review of the data and trend explanations submitted by all branches for consolidation at group level.
Report on other legal and regulatory requirementsReport on the Report of the Management Board and Other Information
Pursuant to the legal requirement under Part 9 of Book 2 of the Netherlands Civil Code regarding ourresponsibility to report on the (complete) Report of the Executive Board and the other information:• We have no deficiencies to report as a result of our examination whether the Report of the Executive Board, tothe extent we can assess, has been prepared in accordance with Part 9 of Book 2 of the Netherlands Code, andwhether the other information as required by Part 9 of Book 2 of the Netherlands Civil Code has been annexed.• We report that the Report of the Executive Board, to the extent we can assess, is consistent with the financialstatements.
EngagementWe are engaged by the General Meeting of Shareholders as auditor of Triodos Bank N.V. for more than 10 yearswith 2015 being the last year before auditor rotation. We have been re-engaged for the audit for the year 2015on 22 May 2015.
Amstelveen, 25 February 2016KPMG Accountants N.V.P.A.M de Wit RA
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Report by the Foundation for the Administrationof Triodos Bank Shares (SAAT)
The share capital of Triodos Bank has been entrustedto the independent Foundation for the Administrationof Triodos Bank Shares (Stichting Administratie-kantoor Aandelen Triodos Bank (SAAT). SAAT issuesdepository receipts to finance the shares. Depositoryreceipt holders benefit from the economic rightsassociated with these shares, such as the right todividends, but do not exercise any control related tothem. Control rights are vested in SAAT. A moredetailed description of the corporate governancestructure of Triodos Bank, and in particular the rightsand responsibilities of SAAT and the depositoryreceipt holders, can be found in the chapter oncorporate governance, on page 39 of this annualreport.
For an overview of the shares taken in trust and theissued depository receipts of Triodos Bank, as at31 December 2015, please refer to page 39 of thisannual report.
In exercising its voting right at the General Meeting ofTriodos Bank (“General Meeting”), the Board of SAATupholds the following principles:• safeguarding Triodos Bank’s mission• safeguarding Triodos Bank’s independence• safeguarding the economic interests of thedepository receipt holders, which relates to TriodosBank’s continuity and profitability, dividends, and thedevelopment of the value of depository receipts. TheBoard of SAAT aims to align the economic interests ofits depository receipt holders and Triodos Bank’smission, for their mutual benefit.
This is reflected by the following stipulations in SAAT’sterms of administration:
Article 6
The foundation shall independently exercise thevoting rights attached to the shares owned by it. Indoing so, it shall be guided by the interests of thedepository receipt holders and the interests of thebank, as well as by the principles expressed in theobjectives of the bank.
The voting policy of SAAT is guided by article 6 of theterms of administration and the principles as statedabove.
SAAT discharges its stewardship responsibilities bymonitoring and engaging with Triodos Bank in linewith the principles described above. It also voluntarilycomplies with the relevant principles and bestpractices of the Dutch Corporate Governance Code,and other well-regarded stewardship regulations.
The Board of SAAT pays particular attention to the midand long term performance of Triodos Bank in terms ofimpact, risk and return. It monitors internal andexternal developments to assess and anticipate anyimpact they might have on Triodos Bank’s essence, themission and the values. The Board of SAAT’s monitoringand engagement activities include:• meetings with Triodos Bank’s Executive Board,between the Chair of the Board of SAAT and the Chairsof the Executive and Supervisory Board, separately andtogether• participating in depository receipt holder meetings,client days and other meetings by invitation incountries with Triodos Bank branches• attending theme days and meetings regarding thelong term perspective of the bank• keeping a close look at developments regardingstakeholder participation, shareholding, corporategovernance but also the sectors where Triodos Bank isactive.
Discussions and meetings take place on a confidentialbasis, as appropriate. Should the Board of SAAT feelTriodos Bank has not responded appropriately toquestions it raises, it has to fulfil its stewardshipresponsibilities and act accordingly in the context ofthe governance of the bank.
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General Meeting 2015The Board of SAAT is Triodos Bank’s sole shareholder.As such, at the General Meeting in Zeist on 22 May2015, it voted on the items below and explained why ithad made the decisions it did. For details of approvedproposals visit www.triodos.com/agm. The Board ofSAAT approved the following proposals:• adoption of the 2014 Annual Accounts and theproposed profit appropriation• discharge of the members of the Executive Board ofresponsibility for their management during 2014• discharge the members of the Supervisory Board ofresponsibility for their supervision during the financialyear 2014• reappointment of Mathieu van den Hoogenband as amember of the Supervisory Board for two years• appointment Udo Philipp as a new member of theSupervisory Board• adjustment of the compensation for travel time of theSupervisory Board members;• amendment of the Articles of Association of TriodosBank N.V.• appointment of PWC as the external accountant ofTriodos Bank N.V. as from 1 January 2016• granting a power of attorney to the members of theExecutive Board in order to obtain depository receiptsin Triodos Bank and to issue shares.
The voting declaration of the Board of SAAT on theproposals explained:• relevant topics from the Annual Accounts werediscussed with the Executive Board from theperspective of the individual branches and businessunits as well as Triodos Bank as a whole. These topicsincluded the essence of Triodos Bank, the impact ofthe bank through its lending, risks of the loanportfolio, innovation of banking and non bankingactivities, improvements in governance, humancapital issues in relation to the mission of the bank,capitalisation of Triodos Bank, relevant bankingratios, financial return and the pay out ratio (dividendpolicy), depository receipts and aspects of the internalmarket, and stakeholder interaction.• why the proposed candidates meet the SAAT-criteriafor (re)appointment. A delegation of the SAAT board
met with the candidates in order to come to aninformed decision regarding the (re)appointment.
A webcast from the General Meeting is available atwww.triodos.com/agm.
Annual Meeting of depositoryreceipt holdersThe Annual Meeting of depository receipt holders washeld on 22 May 2015 at Triodos Bank’s head office.
The Board of SAAT described the rationale behind itsvoting decisions during the meeting. It referred to theinput of depository receipt holders at the informalDepository Receipt Holders´ meetings in Belgium,Germany, Spain and the United Kingdom and to theirquestions at the General Meeting. The Board of SAATinformed investors about the Board of SAAT’sdiscussions with the Executive Board which focusedon Triodos Bank in general and on the Annual Reportand Annual Accounts in particular.
The Annual Meeting of depository receipt holdersapproved the reappointment of Marjatta vanBoeschoten as member of the Board of SAAT, thedecision to amend the Articles of Association of SAAT,the decision to amend the Terms of Administration ofSAAT and the adjustment of the compensation fortravel time of the Board members of SAAT.
The results of the annual survey of depository receiptholders, which was completed by 4,500 respondents,compared to 5,000 in 2014, were referred to at themeeting. The Board of SAAT uses the results to enrichits perspective on the investor group whose interestsguide its voting, and to help determine depositoryreceipt holders’ level of satisfaction about thefinancial return and the delivery of Triodos Bank’smission. According to the survey’s participants, over90% of investors think Triodos Bank aligns its missionand financial returns effectively; a similar level to2014. Excerpts from the results can be found atwww.triodos.com/corporateinformation.
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Meetings and decisions of the Boardof SAATDuring 2015, the Board of SAAT convened four timesin person twice by telephone. The Board of SAAT alsohad three meetings with members of Triodos Bank’sExecutive Board.
Among a breadth of topics discussed during the year,the Board of SAAT paid particular attention to issuesthat are of material interest to Triodos Bank’sdepository receipt holders, as key stakeholders. Theseincluded:• the essence of Triodos Bank. The Board explored theclarity of the essence and the fundamental values thatthe bank represents. It also discussed the interactionbetween individual development and the healthydevelopment of society from the perspective of positivesocial renewal; and the crucial role of transparency inthe economic domain.• Triodos Bank’s strategy. How the mission is applied inthe strategy in practice is of key importance to theBoard of SAAT. As is the long term strategic perspectivein general and Triodos Bank’s ambitions regarding itsfinance activities, including innovation, in particular.• the way the bank realises its impact and the role ofsustainable mortgages in that context• the balance between impact, risk and return.Considering these three elements together helpsclarify the performance of Triodos Bank and the bank’schallenges regarding impact. Impact was linked indiscussions to the delivery of Triodos Bank’s mission,and risk and return in particular to safeguarding theeconomic interests of the depository receipt holdersand the bank’s continuity and profitability.• topics related to depository receipts and capital,including investor relationships and trading overviews,but also the general financial health of Triodos Bank asthis relates to the economic interests of the depositoryreceipt holders. The main financial ratios of TriodosBank were discussed, as well as its capital positionand the impact of stricter regulatory capitalrequirements on impact, return and risk.• the Board of SAAT has been informed by theExecutive Board about the challenges in terms missionand culture that come with the significant growth in
the number of co-workers and the organisational step-up as a result of becoming a medium sized bank.• during the year Triodos Bank’s strategic response tothe 2025 perspective work was shared and consideredin the context of the continuity and long-term financialresilience of Triodos Bank. The Board of SAAT activelycontributed to this exploration of this work to betterdescribe and understand the emerging future during2014. This was supported by input from depositoryreceipt holders in an annual survey during 2015 whichtested their opinion on what are the most materialissues for Triodos Bank. This information contributedto the materiality analysis highlighted in theManagement Board report. Issues addressed in thesurvey were further explored in an in-personstakeholder engagement meeting at the Head Office,attended by the Chair.• in addition, the 2014 annual report (and later the2015 half-year report) was discussed in order tocarefully consider the votes to be cast at Triodos Bank’sGeneral Meeting. The report has been assessed anddiscussed from the perspective of the Board of SAAT’smandate to safeguard Triodos Bank’s mission,independence and the economic interests of thedepository receipt holders
Activities of the Board of SAATThe Board of SAAT carried out the following activities,in addition to the meetings above:• informal meetings with local management of allTriodos Bank’s branches and the management ofTriodos Investment Management• attending international theme days, client anddepository receipt holders and informal discussionswith depository receipt holders in the UK, Belgium,Germany, Spain and The Netherlands• attending annual shareholder meetings ofinvestment funds managed by Triodos InvestmentManagement• annual meeting with a delegation of the SupervisoryBoard• appointment and reappointment process ofmembers of the Supervisory Board. A key focus in thisrespect is the commitment of the candidates toTriodos Bank’s mission.
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• the Chair of the Board of SAAT regularly metbilaterally and in tripartite meetings with the Chairs ofTriodos Bank’s Executive Board and SupervisoryBoard;• the adoption of a Board of SAAT Charter• the permanent education of the SAAT Board throughinternal training on corporate governance and bankcapital requirements• the presentation of candidates for the Board of SAATto the Chair of Supervisory Board and the Chair of theExecutive Board in order to prepare approval of thecandidates according the Articles of Association (6.4)• a delegation of the Board of SAAT met with theexternal accountant.
The Board of SAAT did not seek any external advice, inorder to carry out its responsibilities, during 2015.
Composition of the Board of SAAT andindependence of its membersGiven the responsibility of the Board of SAAT toprotect the identity and mission of Triodos Bank, it isessential that the members of the Board areindependent. For this reason, members of theExecutive Board or members of the Supervisory Boardin office may not be members of the Board of SAAT.
SAAT’s articles of association stipulate that the Boardshall consist of three or more members.
At present, it has five members, from the variouscountries of the Triodos Branches: two Dutch, a
British, a Belgian and Spanish national(s). There wereno changes in the composition of the Board in 2015.
For information about the remuneration of themembers of the Board of SAAT, please refer to theTriodos Bank annual accounts on page 88.
The Board of SAAT expects that it will again be able todeepen its role as a committed shareholder in 2016.Maintaining and intensifying a dialogue betweenTriodos Bank, the Board of SAAT and the depositoryreceipt holders is an essential part of this effort. It willundertake this work not only during the internationalAnnual Meeting of depository receipt holders in TheNetherlands, but also in Belgium, the UK, Spain,Germany, and at a separate meeting in TheNetherlands, where informal meetings for depositoryreceipt holders will take place.
This report is available in full, including additionalcontext for the Board of SAAT’s work, online atwww.annual-report-triodos.com.
Zeist, 25 February 2016
Board of SAAT,Josephine de Zwaan, ChairMike Nawas, Vice ChairMarjatta van BoeschotenSandra Castañeda ElenaFrans de Clerck
SAAT’s registered office is Nieuweroordweg 1,3704 EC, Zeist, The Netherlands.
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Statement of the shares
Statement of the shares taken in trust and the issued depository receipts of Triodos Bank N.V. as at31 December 2015.
31.12.2015 31.12.2014
Triodos Bank NV shares taken in trust,having a nominal value of EUR 50 each 484,329 450,732
Issued depository receipts of Triodos Bank NV,having a nominal value of EUR 50 each 484,329 450,732
Zeist, 25 February 2016
BoardMarjatta van BoeschotenSandra Castaneda ElenaFrans de ClerckMike NawasJosephine de Zwaan, Chair
Independent auditor’s report
Introduction
We have audited the above statement that shows the position as at 31 December 2015 in respect of the sharesplaced in trust and the depository receipts of Triodos Bank NV shares issued by Stichting Administratiekantooraandelen Triodos Bank, Zeist. This statement is the responsibility of the Foundation’s management.
Our responsibility is to express an opinion on this statement, based on our audit.
Scope
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing and webelieve that out audit provides a reasonable basis for our opinion.
Opinion
In our opinion, this statement provides a true and fair view of the Triodos Bank NV shares placed in trust and theissued depository receipts of Triodos Bank NV shares as at 31 December 2015.
Amstelveen, 25 February 2016
KPMG Accountants N.V.P.A.M. de Wit RA
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BiographiesJosephine de Zwaan (1963), Chair
Josephine de Zwaan is also a Member and Chair of theSupervisory Board of Stichting Triodos Holding. She was alawyer for more than thirteen years, specialising in majorreal estate projects. During the last five years of thatperiod, she was a member of the partnership (CMS) DerksStar Busmann, where she was in charge of a team of realestate lawyers. Although no longer acting as a lawyer, sheis still involved in this firm as an advisor to the board.Since 2000 she has acted in administrative andsupervisory roles in education, health care and culture inparticular (Weleda, Dutch Association of Waldorf Schools,Bureau Promotie Podiumkunsten, Iona Stichting;nowadays she is acting for Hogeschool Leiden, StichtingVilans, Raphaelstichting). She is a member of the board ofAcademy for Liberal Arts and the Institute for PositiveHealth. In 2009 Josephine de Zwaan was appointedArbitrator for the Arbitration Tribunal Foundation forHealth Care and Member of the Governance Committeeof the Arbitration Board for Health Care. In 2013 she wasalso appointed as a Member of the Supervisory Board ofStichting Cito, since 2015 she is chairing this board andvice chairing the board of Cito B.V. Josephine de Zwaanwas first appointed in 2010 and her present term expiresin 2016. She is of Dutch nationality and does not own anyTriodos Bank depository receipts.
Marjatta van Boeschoten (1946)
Marjatta van Boeschoten was a member of Triodos BankSupervisory Board from 2001 to 2009. She was a lawyer ofthe Supreme Court in England for seven years beforebecoming a management development consultant. She isDirector of Phoenix Consultancy and has worked withlarge organisations in the public and private sectors in theUK and internationally. She is on the Advisory Board ofNeuguss Verwaltungsgesellschaft and is GeneralSecretary of the Anthroposophical Society in GreatBritain. Marjatta van Boeschoten was first appointed tothe SAAT Board in 2009 and her present term expires in2018. Her nationality is British and she owns one TriodosBank depository receipt.
Sandra Castañeda Elena (1974)
Sandra Castañeda Elena is currently Senior AdvisorSustainability at Inditex S.A. (owner of Zara). She hashelped integrate environmental and social criteria into thebusiness strategies of companies and academicinstitutions, in different positions since 2005. She is aMember of the Supervisory Board of Stichting TriodosHolding since 2014. Previously, she was part of the coreteam setting up Triodos Bank in Spain. Sandra CastañedaElena was first appointed in 2013 and her present termexpires in 2016. She is of Spanish nationality and owns53 Triodos Bank depository receipts.
Frans de Clerck (1945)
Frans de Clerck is a co-founder of Triodos Bank Belgium(1993) and a former Member of the Executive Board ofTriodos Bank NV. He is a Member of the SupervisoryBoard of Stichting Triodos Holding, and a Member of theSupervisory Board of Boss Paints NV and of the Hélène DeBeir Foundation. Frans de Clerck has been awarded theCitizenship Price 2015 by the Belgian P & V Foundation.Frans de Clerck was first appointed in 2010 and hispresent term expires in 2016. He is of Belgian nationalityand owns 211 Triodos Bank depository receipts.
Mike Nawas (1964)
Mike Nawas is co-founder of Bishopsfield CapitalPartners Ltd (BCP), a financial consultancy based inLondon. He has been affiliated with Nyenrode BusinessUniversity in The Netherlands as Associate ProfessorFinancial Markets since 2011. Prior to that he worked atABN AMRO Bank for twenty years in various positions,including from 2005 as group director worldwideresponsible for helping clients access the credit marketsvia loans, bonds or structured finance. Since 2013 he hasbeen Chair of the Academy for Liberal Arts, anorganisation focused on philosophical development andethical involvement of experienced professionals in TheNetherlands. Mike Nawas was first appointed in 2014and his present term expires in 2017. He is of Dutch andUS nationality and does not own any Triodos Bankdepository receipts.
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Appendix
Co-worker StatisticsFor the years 2011 to 2015 the data below are part of KPMG’s assurance.
Social key figures*
2015 2014 2013 2012 2011 2010 2009
Number of co-workers at year-end 1,121 1,017 911 788 720 636 577
Average number of ftes**during the year 974 883 785 694 636 556 482
Number of ftes** at year-end 1,021 931 838 722 660 577 525
Absenteeism 2.7% 2.6% 2.6% 3.0% 2.2% 1.9% 2.6%
* The co-worker report includes everyone employed by Triodos Bank. Co-workers of the joint venture TriodosMeesPierson are not included.
** Fte stands for full-time equivalents and is the number of co-workers calculated on a full-time basis per week.(For The Netherlands this is 40 hours, Belgium 37 hours, United Kingdom 37.5 hours, Spain 37 hours, Germany 40 hoursand for France 35 hours).
Training expenses per co-worker
2015 2014 2013 2012
The Netherlands 2,037 1,976 1,803 1,650
Belgium 1,595 1,549 1,918 2,015
United Kingdom 432 983 934 694
Spain 777 1,181 1,281 1,080
Germany 900 2,377 2,332 1,765
France 1,757 1,735 3,186 419
Private Banking NL 1,934 4,135 4,448 2,383
Head office 2,727 2,695 2,914 2,205
TIAS 416 0 – –
Triodos Investment Management 3,227 2,669 3,517 2,821
Average 1,692 1,856 2,055 1,731
Increase –8.8% –9.7% 18.7% –14.3%
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Training days per co-worker
2015 2014 2013 2012
The Netherlands 1.6 3.5 2.7 2.2
Belgium 2.3 3.5 2.8 6.0
United Kingdom 0.9 3.3 1.9 1.5
Spain 11.7 7.1 7.1 10.5
Germany 1.0 3.1 2.9 2.4
France 1.6 5.3 9.0 –
Private Banking NL 2.6 5.4 5.4 2.9
Head office 4.4 2.9 2.2 2.8
TIAS 3.0 0.0 – –
Triodos Investment Management 2.1 3.3 2.8 2.8
Total 4.6 4.3 3.7 4.5
Salaries
CountryRatio highest full-time salary 2015 /
median full-time salary 2015*
Ratio of the salary increase of the highestfull-time salary 2015 / median salary
increase of the full-time salary 2015**
The Netherlands 4.7 0.9
Belgium 1.9 0.9
United Kingdom 4.5 2.7
Spain*** 6.3 –
Germany 2.6 0.0
France 2.9 2.0
Total 5.7 0.9
* Ratio of the highest-paid co-worker to the median of the compensation for all co-workers (the median is definedexcluding the maximum full-time salary in order to be transparent about the difference between the highest paid co-worker and the rest of the co-worker group, in line with GRI guidelines)
** Ratio of percentage increase for the highest-paid co-worker to the median percentage increase for all co-workers (themedian is defined excluding the highest-paid individual in order to be transparent about the rate of percentageincrease for the highest paid co-worker and the rest of the co-worker group, in line with GRI guidelines)
*** Ratio for Spain cannot be determined yet and has not been included in these figures, because the salary increases for2015 were not yet final at the time of publication.
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Fixed and variable remuneration awarded to Identified Staff in relation to year 2015, by instrument
“Identified staff” in seniormanagement functions
All other“Identified staff”
Number of co-workers 9 44
Remuneration (in thousands of EUR)
Total fix remuneration 1,789 4,805
Total variable remuneration* 5 47
of which in cash 5 47
of which in shares or share-based instruments* – –
of which in other instruments* – –
Total amount deferred remuneration* – –
Welcome payments
Number of beneficiaries 0 0
Total amount – –
Severance payments
Number of beneficiaries 2 4
Total amount 692 657
Maximum amount 567 394
* This excludes variable remuneration in Spain which was not available at the time of publication.
There are no co-workers who earned more than EUR 1 million. There is no outstanding deferred remuneration(vested and unvested).
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Age categories of co-workers of Triodos Bank at year end
2015 2014 2013 2012
Age number % number % number % number %
< 28 years 73 7 86 8 72 8 62 8
28 – 35 years 272 24 262 26 252 28 229 28
35 – 42 years 317 28 285 28 252 28 211 28
42 – 49 years 270 24 219 22 186 20 159 20
49 – 56 years 128 11 105 10 90 10 71 9
>= 56 years 61 5 60 6 59 6 56 7
Total 1,121 100 1,017 100 911 100 788 100
Average 40.4 39.6 39.6 39.5
Years of service of co-workers of Triodos Bank at year end
2015 2014 2013 2012
Years of service number % number % number % number %
0 – 1 years 226 20 186 18 175 19 131 17
1 – 3 years 292 26 269 26 240 26 224 28
3 – 5 years 195 17 186 18 185 20 174 22
5 – 10 years 284 25 272 27 210 23 168 21
10 – 15 years 75 7 67 7 68 7 66 8
> 15 years 49 4 37 4 33 4 25 3
Total 1,121 100 1,017 100 911 100 788 100
Average 4.8 4.8 4.7 4.6
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Sickness rate
2015 2014 2013 2012
The Netherlands 4.2% 3.3% 3.3% 2.9%
Belgium 3.4% 2.8% 3.6% 3.4%
United Kingdom 1.2% 0.6% 1.4% 0.9%
Spain 2.0% 2.3% 1.9% 2.7%
Germany 2.9% 2.1% 1.6% 4.7%
France 0.0% 0.0% 0.0% -
Private Banking NL 5.5% 6.9% 4.1% 4.2%
Head office 3.0% 4.1% 3.1% 3.2%
TIAS 0.5% 1.8% – –
Triodos Investment Management 2.1% 3.8% 2.5% 3.9%
Total 2.7% 2.6% 2.6% 3.0%
Attrition in first year
2015 2014 2013 2012 2011
The Netherlands 7.1% 6.3% 13.6% 0.0% 14.3%
Belgium 4.3% 0.0% 4.5% 30.0% 16.7%
United Kingdom 25.0% 21.4% 5.0% 12.5% 3.6%
Spain 22.0% 19.5% 9.3% 10.9% 4.7%
Germany 13.3% 11.1% 8.3% 22.2% 0.0%
France 0.0% 0.0% 0.0% – –
Private Banking NL 0.0% 0.0% 0.0% 0.0% 0.0%
Head office 17.6% 9.5% 0.0% 13.0% 23.8%
TIAS 50.0% 0.0% – – –
Triodos Investment Management 4.0% 6.9% 7.7% 10.0% 12.5%
Total 15.8% 11.6% 7.4% 11.8% 10.6%
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Environmental StatisticsFor the years 2011 to 2015 the data below are part of KPMG’s assurance.
Environmental key figures
absolute quantities/ftes 2015 2014 2013 2012 2011 2010
Energy consumption
Electricity in kWh/fte 2,533 2,686 2,759 3,045 2,622 2,991
Gas in m3/fte 105 103 129 127 134 163
Business travel
By aircraft in km/fte 4,762 5,154 6,406 5,940 6,160 6,804
By car in km/fte 1,246 1,267 1,409 1,450 1,611 2,389
By public transport km/fte 713 674 810 858 1,194 1,149
Commuting
By car in km/fte 4,435 4,534 4,744 4,209 4,866 5,591
By carpool in km/fte 109 74 79 32 50 197
By public transport in km/fte 3,241 3,297 3,108 3,529 3,744 3,939
By bike or on foot in km/fte 521 575 566 628 639 724
Paper usage
Total paper usage in kg/fte 180 214 209 286 346 306
Blank copy recycled paper in kg/fte 26 20 23 23 25 32
Letter head paper/leaflets/etc.in kg/fte 155 194 186 264 321 274
Letter head paper/leaflets/etc.in kg/customer 0.27 0.34 0.30 0.44 0.60 0.56
Co-workers
Ftes 968 879 782 693 636 556
External, temporary co-workers 93 65 39 46 31 30
Buildings (absolute figures)
Surface area in m2 31,687 31,052 30,006 27,413 23,746 23,250
Volume in m3 104,661 102,407 98,397 91,253 81,957 88,256
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Emission of CO2 (equivalents)
in thousands of kg 2015 2014 2013 2012 2011 2010
Electricity* 1 100 96 353 17 –
Gas consumption (heating) 90 124 130 112 34 232
Paper 293 314 265 468 907 686
Public Transport 214 260 224 209 136 107
Car 1,324 1,145 1,046 865 774 867
Flights 1,119 1,141 1,145 936 1,051 908
Total 3,041 3,084 2,906 2,953 2,919 2,800
Minus: Compensation for CO2 credits –3,041 –3,084 –2,906 –2,953 –2,919 –2,800
CO2 balance (neutral) – – – – – –
CO2 compensation costs per tonne (EUR) 8.40 8.40 12.50 12.50 12.50 12.50
* While the total amount of electricity decreased by 6%, the significant decrease in the related CO2 emission is due to achange in the method of calculating this figure.
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About This Report
Additional information can be found online atwww.annual-report-triodos.com. The 2015 AnnualReport is an integrated annual and sustainabilityreport covering the activities of Triodos Bank NV inThe Netherlands, Belgium, the UK, Spain andGermany, as presented in the Triodos Group Structure.The report covers the period from 1 January to31 December 2015. Triodos Bank’s previous integratedannual and sustainability report was published inMarch 2015 and covered the 2014 calendar year.
The reporting in the 2015 financial year is based onthe same principles as the 2014 report. Any changesin the methods of calculation used are explained inthe text. When preparing the Triodos Bank AnnualReport, a working group examines how the mostrecent reporting guidelines and best practices can beused to improve the report in the future. This year, forthe second time, we have requested limitedassurance on the Management Board report, whichincludes 2015 impact data. KPMG Accountants N.V.audit the Financial statements.
Transparency and reportingTriodos Bank has used the guidelines of the GlobalReporting Initiative (GRI) since 2001.
GRI was established in 1997 by the United Nationsand the Coalition for Environmentally ResponsibleEconomics (CERES). GRI wants to organise reportingon sustainability in a consistent manner and, in thisway, make performance objective and comparisoneasier. Triodos Bank is an organisational stakeholderof GRI.
During 2013, GRI launched new G4 guidelinesdesigned to make reporting both more relevant to the
sustainability impact of the institution and moremeaningful for its stakeholders. The main way thishappens is by focusing on the issues that we and ourstakeholders think are most important, or most‘material’ to our work. We took this approach for thefirst time in 2013 and have developed it further,adopting the G4 guidelines in full since 2014, incombination with our online report. You can find moreat www.annual-report-triodos.com.
Our approach to reporting is developed on the basis ofinternal and external input. This year’s report hasbeen developed with the benefit of conversations witha number of external parties, including stakeholderswho participated in a special engagement session,PWC, the International Integrated Reporting Council(IIRC), GRI and members of the Global Alliance forBanking on Values in particular. We are grateful fortheir contributions and insights.
Disclosure requirementsDisclosures are required in the annual report both tomeet Dutch law and to comply with other regulation,in particular the Capital Requirements Regulation andthe Capital Requirements Directive. CapitalRequirements Regulation is direct regulation from theEuropean Union. The Capital Requirements Directivehas been translated by the Dutch Government intovarious laws and regulations that apply to TriodosBank.
The main part of these disclosures appears in thisannual report. Additional required disclosures arepublished on our websites locally and on thecorporate website: www.triodos.com andwww.annual-report-triodos.com.
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Addresses
International head officeNieuweroordweg 1, ZeistPO Box 553700 AB Zeist, The NetherlandsTelephone +31 (0)30 693 65 00www.triodos.com
Branches
The Netherlands
Utrechtseweg 44, ZeistPO Box 553700 AB Zeist, The NetherlandsTelephone +31 (0)30 693 65 00www.triodos.nl
Belgium
Hoogstraat 139/3 – Rue Haute 139/31000 Brussels, BelgiumTelephone +32 (0)2 548 28 28www.triodos.be
Ghent Regional officeSteendam 89000 Gent, BelgiumTelephone +32 (0)9 265 77 00
United Kingdom
Deanery RoadBristol BS1 5AS, United KingdomTelephone +44 (0)117 973 9339www.triodos.co.uk
Edinburgh Regional office50 Frederick StreetEdinburgh, EH2 1EX, ScotlandTelephone +44 (0)131 220 0869
Spain
C/ José Echegaray 5-7Parque Empresarial Las Rozas28232 Madrid, SpainTelephone +34 91 640 46 84www.triodos.es
A Coruña officeAvenida Finisterre 2515004 A Coruña, Spain
Albacete officeC/ Francisco Fontecha, 502001 Albacete
Badajoz officeAvda. de Fernando Calzadilla, 106004 Badajoz
Barcelona officeAvenida Diagonal 418 bajos08037 Barcelona
Bilbao officeC/ Lersundi 1848009 Bilbao
Girona officePça. Catalunya 1617004 Girona
Granada officeC/ Gran Vía de Colón 2918001 Granada
Las Palmas de G.C. officec/ Manuel González Martín 235004 Las Palmas de Gran Canaria
Madrid officeC/ Ferraz 5228008 Madrid
Madrid office 2C/ Mártires Concepcionistas 1828006 Madrid
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Murcia officeAvenida de la Libertad s/n30009 Murcia
Oviedo officeC/ Cabo Noval 1133007 Oviedo
Palma de Mallorca officeAvenida de Portugal 507012 Palma de Mallorca
Pamplona officeAvda. del Ejército, 3031002 Pamplona
S.C. de Tenerife officeRambla de Santa Cruz 12138004 Santa Cruz de Tenerife
Sevilla officeC/ Marqués de Paradas 2441001 Seville
Valencia officeC/ Del Justícia 146004 Valencia
Valladolid officeAcera de Recoletos 247004 Valladolid
Zaragoza officeAvenida César Augusto 2350004 Zaragoza
Germany
Mainzer Landstr. 21160326 Frankfurt am Main, GermanyTelephone +49 (0)69 717 19 100Fax +49 (0)69 717 19 222www.triodos.de
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Production
Triodos Bank NV 2015 Annual Report
Published
March 2016
Text
Triodos Bank
Coordination
RRED Communications, The Hague, The Netherlands
Concept & Art Direction
Michael Nash Associates, London, United Kingdom
Design and layout
nexxar GmbH, Vienna, AustriaGrafisch ontwerp PI&Q, Zeist, The Netherlands
Printing
Drukkerij Pascal, Utrecht, The Netherlands
Circulation
1,000 copies
Contact
If you have comments or questions about this report,please contact your local office of Triodos Bank.Addresses are provided on page 194.
This document can be downloaded fromwww.triodos.co.uk andwww.annual-report-triodos.com
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Sustainablebanking
means using money with conscious thought about its environmental, cultural and social impacts, with the support of savers and investors who want to make a difference, by meeting present day needs without compromising those of future generations.
